Software escrow

Software escrow (소프트웨어 임치/任置) is the deposit of the source code of software with a third party escrow agent (수치인/受置人).

Escrow is typically requested by a party licensing software (the licensee), to ensure maintenance of the software.

The software source code is released to the licensee if the licensor files for bankruptcy or otherwise fails to maintain and update the software as promised in the software license agreement.

Statutory ground
Software escrow service was not strange to Korean computer programmers in the early 2000s. The Copyright Act 2009 has incorporated the software escrow system into it. Subject to Article 39-2 of the Enforcement Decree of the Act, the Korea Copyright Commission (한국저작권위원회) has been designated as an escrow agent.

Article 107-1 (Program Escrow) of the Copyright Act
 * (1) The owner of author’s property rights of a program and a party authorized to exploit the program may by reaching agreement with a party designated by Presidential Decree (hereinafter referred to as “depositee” in this Article) deposit the source code and technical information of the source code of the program and technical information, etc. to the depositee.
 * (2) A party authorized to exploit the program may demand the depositee provide the source code of the program and technical information, etc. when one of the reasons set forth under the agreement of Paragraph (1) occurs.
 * [This Article added on April 22, 2009]

Escrow service
The service provided by the escrow agent – generally a business dedicated to that purpose and independent from either party – consists principally in taking custody of the source code from the licensor and releasing it to the licensee only if the conditions specified in the escrow agreement are met.

Under the Copyright Act, the Korea Copyright Commission provides the online escrow service to software houses and computer programmers.

Necessity of Software Escrow
As the continued operation and maintenance of custom software is critical to many companies, they usually desire to make sure that it continues even if the licensor becomes unable to do so, such as because of bankruptcy. This is most easily achieved by obtaining a copy of the up-to-date source code. The licensor, however, will often be unwilling to agree to this, as the source code will generally represent one of their most closely guarded trade secrets.

As a solution to this conflict of interest, source code escrow ensures that the licensee obtains access to the source code only when the maintenance of the software cannot otherwise be assured, as defined in contractually agreed-upon conditions.

Customers

 * 대기업 등 사용기업에게 핵심 기술의 제공을 요구받고 있는 기업
 * 영업단계에서 사용기업에게 해당 기술에 대한 신뢰성을 보장하고 싶은 기업
 * 내ㆍ외부 관계자에 의한 기술유출이 우려되는 기업
 * 소프트웨어 등의 IT기술을 정부에 납품 용역하는 기업
 * 소프트웨어의 안정적인 유지보수 등을 위해 소스코드 및 기술정보 등
 * 핵심기술 확보가 필요한 기업
 * 소프트웨어 등의 IT기술을 발주하는 정부기관 등

Software

 * 소스프로그램, 오브젝트프로그램
 * 설계서ㆍ사양서, 플로챠트
 * 매뉴얼, 유지보수 자료, 개발기술자 정보 등

Information technologies

 * 설계도, 회로도, 반도체칩
 * 데이터베이스, 디지털콘텐츠
 * 회계관련 문서
 * 계약 당사자간 협의된 기술 정보 등 핵심 기술자료를 담고 있는 소프트웨어 및 문서

Escrow agreements
Source code escrow takes place in a contractual relationship, formalized in a source code escrow agreement, between at least three parties:
 * one or several licensors,
 * one or several licensees,
 * the escrow agent.