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Quoted text is from <[EMAIL PROTECTED]
et.in>, by Ajay K Sanghi <[EMAIL PROTECTED]>
>There's one more request the EDI implementing company ("BIG" one) is making,
>that is to "trigger escrow" in case the documentation accompanying the
>sofware do not "match". In this case, they will send us several reminders
>for meeting/correcting the documented feature and if within reasonable time
>(1-2-3 months) we are still unable to, then they can trigger the escrow
>account. They say that they will use the source only for supporting their
>clients and will not do anything else with it and will not claim for IPR.
My feeling is that the maintenance of accurate documentation should be a
matter for the conventional commercial agreement. The basic reason for
software escrow agreements tends to be to give some measure of support
for the buyer if the supplier of the software ceases to be able to
fulfil his supply commitments. One would hope that before entering into
the agreement the buyer had assessed the suitability of the product,
including the accuracy of the documentation. Any enhancements made
during the lifetime of the product are not so critical for the buyer
unless the supplier refuses to supply the original product, since they
can still get what they signed up for.
I think that the termination of the agreement between supplier and
buyer, for reasons clearly stated in the agreement, should precede any
activation of escrow.
>I've told them of software being "licensed" and NOT "sold" and a DEVELOPER
>disclaims all warranty w.r.t "merchantibility", "fitness for particular
>use", conformance with documented features etc. and that they are standard
>part of any pre-packaged software license agreement and that our liability
>is limited to only refund of the software they paid for, in case we are
>unable to correct the behaviour.
>
>Their concern is that replacing EDI software is not plug and play and
>therefore rules associtated with "pre-packaged" cannot be applied in it's
>entirety.
They have a point. An EDI system is of little value as a self-contained
product - it is intended as a mediator between other systems and
individual installations normally demand customisation. Whether that
point is relevant is another matter, since they presumably intend to use
your product as part of an end user system for which they take
responsibility. The 'shrink wrap' argument seems strange, since the
buyer is committing himself because he deems the product to be suitable
for his purposes, and is trying to define a commercial relationship with
you to regulate the supply. You are presumably being asked to move away
from the 'shrink wrap' refusal to accept any responsibility for your
product, but receiving in exchange a commitment by the buyer to purchase
a certain quantity.
Escrow is really a separate issue. It is a form of insurance for the
buyers that they can maintain their existing installations, and have a
period of grace to find a replacement for your product, in the event of
your ceasing to supply them (even if the reason for this cessation is
that you have been bought up by their worst competitor!). Your aim is to
make sure that the escrow agreement is worded so that it would still be
attractive for their worst competitor to buy you up. This means that,
even though they may gain physical access to the source code, their
rights to use it as a basis for *development* need to be carefully
regulated (in our case we quite simply forbid it). I use the take-over
example as a way of illustrating that the IPR for your product have a
commercial value, you need to assess if an escrow agreement affects this
commercial value, and if it does then the buyer needs to compensate you
in some way.
If the buyer is asking for more than limited insurance I would suggest
that what they are *really* asking for is a source code license, that
you should consider making it available to them, and that they should be
prepared to pay the considerable sum which would be involved.
Regards
Chris
- --
Chris Johnson +44 (0)20 8501 1490 (home)
EDIMatrix Ltd +44 (0)20 8559 2454 (work)
+44 (0)20 8559 2497 (fax)
http://www.edimatrix.co.uk
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