Embracing escrow

This article first appeared in issue 239 of .net magazine – the world's best-selling magazine for web designers and developers.

For small and busy web design and development agencies, the legal protection of ideas, designs, creativity and code is unlikely to be at the forefront of most directors’ minds. But intellectual property is a web professional’s most treasured business asset. Research firm Forrester estimates that proprietary information and trade secrets represent two thirds of an organisation’s value. Should the worst happen, you need to know your company’s most precious intellectual property is safe.

Escrow provides a secure, independent repository for everything from software code to manufacturing designs. Source code escrow originally came into play to protect the licensees who were receiving the object code from a compiled language such as C++ or Java. While object code is not a problem that developers working with alternative languages and frameworks face, there are situations where an escrow agreement would be appropriate.

Imagine a design agency working with a developer to create some custom code for a client’s website. If the developer suddenly disappears – either because they’ve gone out of business or been taken over by another company – where can the agency turn for software amendments or updates to the original code? For the developer, an escrow agreement protects code from theft or being sold or given away by a partnering agency. The potential impact, including process disruption, data loss and compromised security, could have far-reaching implications for a business’s finances, operations and reputation.

While the web community thrives on trust and the sharing of information, the protection and integrity of that information remains crucial.

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