Source code escrow

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Source code escrow means deposit of the source code of the software into an account held by a third party escrow agent. 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.

Source code escrow services may be very limited, such as verifying that media is readable, or very comprehensive, such as doing a complete build of the software based on the source code and verifying that features match the binary version.

[edit] Election law

An entirely different use of source code escrow was made by the State of North Carolina in 2005, when it enacted an election integrity law. This law was put in place, in part, to avoid glitches in electronic voting machines as seen in the North Carolina 2004 elections. The law required the source code escrow for the original purpose of protecting the licensee in the event of the bankruptcy of the licensor. However, it went further and took the unprecedented step of allowing, and in fact requiring, review of the code in escrow. It allowed review by the State Board of Elections, Office of Information Technology Services, the State chairs of each political party, the purchasing county, and up to three designated agents of same. It required review by the State Board of Elections prior to certifying any voting system. While previous use of source code escrow had the intent of concealing the code from the user (while still assuring access in the event the supplier could not support the code), the North Carolina law used source code escrow to allow the user to inspect the code.^[1]

While the right to inspect might have been a new use of source code escrow in this particular case, that right appears routinely in the standard agreement forms of some escrow agents. Inspection, or verification as it is often called, can be done either before or after escrow materials have been deposited. The licensor may or may not be present. If present, the licensor should never be allowed to interact with the verification process.