Frequently Asked Questions

Escrow transactions can be a fairly complex endeavor – one multinational corporation with more than $100bn in annual revenue once cold-called one of our interns. Within 6 month it became our 5th largest client globally.
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Frequently Asked Question when it comes to Escrow

If the FAQ below leave any questions unanswered please contact us, we will make sure to have all questions answered in an initial discovery call. 

1. What is Escrow?

Escrow protects a business critical investment, mainly a software, by ensuring that the licensee will have access to underlying information – source code in the event of software escrow – in the event defined release events occur. E.g. the licensor goes out of business, discontinues support of the licensed software, breaches maintenance obligation, goes bankrupt, sells its IPRs in the material or other agreed release events.

2. Why do you need Escrow?

In general we do not charge for the time and effort associated with changes to our standard agreements – we simply believe fair terms should not have a price tag on it. We are happy and willing to help you to set up the best possible escrow solution for all parties. However, some customisations to the agreement may change the fees, e.g. deposit amounts, changes to our liabilities, etc. We will in any case inform you upfront about the fees you have to expect.

    3. How much does an escrow solution cost?

    Once you assessed the risk associated with your applications -usually through a benchmark with industry standards- and want to start mitigating these risks German Escrow helps you to push through the full process. We offer agreement templates and will suggest service levels that are required.

    Once we reach an agreement we start implementing the licensee, the licensor and the escrow agent, us. Following the execution of the agreement by all parties, German Escrow collects the material from the licensor and carries out the requested testing level. Following successful testing of the deposited material, we generate a testing report. If testing is successful and there is no corrupt data, the material is stored as a dual-deposit in a safe and one more secure location. We also manage the deposit of further material based on the agreed release cycles and escrow agreement terms. If a release event occurs, the licensee will inform the parties and the release process commences. If the release event is confirmed the material will be forwarded to the licensee.

    Typical release events are:​

    • Insolvency of the licensor
    • Licensor going out of business
    • Licensor does not fulfill support or maintenance obligations
    • Licensor sells IPRs to a competitor or merges with another software firm
    • The software is no longer marketed

    4. What is the minimum testing level applied to material?

    German Escrow conducts a media integrity check on all materials received free of charge. This is a basic media check including: media read check, copy check, search for source code, password and encryption check and virus scan. The media integrity check however does not test for the completeness and correctness of the source code or other deposited material. For further testing please refer to our verification section.

    5. Does GE offer verification testing on the material?

    Yes. It is highly recommended to carry out one verification in conjunction with all software escrow agreements in order to ensure the usability of the material deposited under escrow.

    6. How is the material stored?

    The material is stored as dual-deposit. One copy is deposited in a secure location, which is 24/7 intruder alarm and access controlled, video monitored and has smoke detection. It is also climate stable, to ensure the durability of the media. Depending on the agreement terms all deposited materials are stored on a physical media and in addition digitally in an encrypted and safe digital vault.

    7. Do you provide the escrow agreement template?

    Yes, we provide the escrow agreement template for any escrow solution, as well as further information on how to set it up

    8. What companies use escrow solutions?

    Escrow has become an industry best practice.

    Companies of all sizes and industries from around the world use escrow solutions. Many escrow clients can be found in regulated industries such as the finance and insurance industry, local and federal governmental organizations, including the military, police and fire services and companies that run critical infrastructures such as electricity and water suppliers, hospitals and infrastructure operators.

    On top of that, publicly listed, midsize and small businesses, as well as investors,  use escrow solutions. 

    9. What kind of payments are accepted?

    You will receive an invoice with instructions after the account is set up. Usually, payments are done by wire transfer. 

    10. How are deposits made?

    Deposits can be provided by submitting the materials on durable physical media (such as CD/DVD/Blu-Ray/external USB or Hard Drive) to our office address or you may use a military-grade secure digital upload function to make digital deposits.

    11. How is the escrow account kept up to date?

    Each time a deposit is made all parties will be informed by German Escrow. This is usually done by sending out the media integrity check or verification report to the parties. You can also at any time request a deposit overview from German Escrow. German Escrow will additionally manage the deposit requests in accordance with the terms of the escrow agreement actively.

    Request a Discovery Call

    If you are not sure which type of escrow agreement is the right one for you, talk to us and we navigate you to the right agreement for your project!

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