Effective software escrow arrangements balance the legitimate requirements of users for access to source code with the need of developer and vendors to jealously guard their intellectual property assets. Users must be able to preserve their software investment and access to source code can be required where the vendor is no longer able to provide maintenance services. At the same time, unrestricted, inadvertent or unnecessary disclosure can prematurely destroy the lifecycle of the software product.

Your source code escrow agreement should clearly define the circumstances under which the user is entitled to access the source code. The procedures for claiming rights to the source code should also be clearly defined.

Your source code agreement must provide you with an opportunity to challenge source code claims. The agreement should provide for arbitration of disputes and establish procedures for protecting you from frivolous breach of contract allegations.

Ease of administration should also be considered. Rather than simply releasing source code to qualifying licensees for their unrestricted use, consider authorizing only sublicenses from the escrow agent. This approach allows you to preserve some protection while negotiating resolution of the circumstances giving rise to release of the source code.