With the world's increasing dependence on technology—whether it's mission-critical software or simply a proprietary database—companies face increasing pressure to improve the protection of intellectual property assets. Consider the trend revealed by a PricewaterhouseCoopers report on the market value of the S&P 500 companies. This group of the nation's largest firms reported that 78% of its assets were “intangible assets.” Management has finally recognized the advantage of placing value on intellectual property.
Patent, copyright, and trade secret laws are the most commonly known methods for protecting these assets. However, many leading organizations are being called upon to standardize their management and protection strategies to ensure market value and shareholder value preservation. To guarantee total management and protection, many companies use technology escrow services, provided by a neutral third party, to protect their intellectual property assets and investments from undue risk.
How Does Technology Escrow Work?
Technology escrow services are used to safeguard proprietary information. The intellectual property assets—such as confidential business records, proof of ownership data, or technology development documentation—are placed in escrow with a trusted third-party escrow agent such as Iron Mountain, the world's leading provider of intellectual property management services.
Technology escrow works like an insurance policy for intellectual property by providing access to the proprietary information under specific and controlled circumstances. As a neutral third party, Iron Mountain dates and time-stamps all materials deposited into escrow, creating an audit trail of the technology development. This provides you with independent validation of the ownership of the intellectual property which resides in the escrow deposit.
Technology escrow helps safeguard technology ownership and enhances existing legal protection under copyright, patent, and trade secret laws. This lends itself as a best practice; it works in conjunction with current laws and adds credence to intellectual property claims. It provides evidence of when and how an emerging technology was developed. This can significantly strengthen a company’s position in any legal dispute concerning intellectual property rights and is commonly used to administrate the documentation of the development of a company’s technology.
The following describes intellectual property best practices being adopted and implemented by today’s market leaders.
Reinforce the Confidentiality of Your Proprietary Business Information
For organizations where the proof of ownership or employee confidentiality of its technology or any facet of its business operations is a concern, the best practice is to establish limited access to proprietary technology and business information and to escrow all sensitive work documents. Economic espionage is big business where the main source of vulnerability is from disgruntled or recently discharged employees who try to sell trade secrets for profit or simply want to retaliate against their former employer by exposing its secrets. Business plans, customer lists, pricing data, investors’ names, marketing and sales strategies, and just about anything deemed valuable but not necessarily covered under standard copyright or patent laws may be considered proprietary or a trade secret.
By copying all project documents and associated materials and establishing an escrow account, an organization reinforces the confidential status of the information and provides an audit trail that will strengthen its position as owner and proprietary rights holder. Not only does it reinforce the confidential status of the information but that same information can also be used as undeniable physical evidence in the court of law.
Prove the Ownership of Your Idea with Documentation
Intellectual property legal experts say that in the area of patents, what is often litigated is the issue of when an idea is conceptualized. This means that if your patent is challenged, you may have to show when your idea was conceived, and, in some cases, when it was put into use. And that requires documentation.
The ability to establish and provide evidence that a company or person is the “originator” of an idea or work in progress can be critical in the dispute with anyone claiming to be the first to invent—and therefore entitled to—a particular patent. Various submissions, such as documents, working prototypes, computer programs, drawings, email communication, and any other materials that can corroborate first conceptualization are critical in collecting evidence that supports an organization’s or individual’s claim. By escrowing any of the aforementioned material, the inventor can substantiate proof of conception or an actual working sample of the invention. Without adequate corroboration, patent rights can be lost to another person or company who may be a competitor or who may license the patent rights to a competitor.
Safeguard Your Technology Development
With technology, many advances will be in the form of software source code. To ensure your technology development is protected via registration, the U.S. Copyright Office requires that the first and last 25 pages of source code be filed with them. Prudent legal counsel, though, will advise their clients to deposit the entire source code of the registered version in escrow. Such a deposit removes any doubt of the content of the copyrighted works.
By date and time-stamping all technology escrow deposits and keeping each set of deposited materials separate, the integrity of older versions already in escrow is maintained. This creates an independent audit trail of historical development which is the cornerstone to establishing the date and time of creation of ideas or know-how. This way, a genealogy of the product is kept on record with an independent third party, who can then testify to its legitimacy.
Summary
In each of these situations, it is important to note that a reliable, trusted, neutral third party, in the form of an escrow agent such as Iron Mountain, can provide the support necessary to corroborate any claims by providing the courts with pertinent information to reinforce any organization’s claim to its intellectual property assets.
New technologies will continue to grow, prosper, and penetrate our existence, and as a technology developer, you need to protect what is yours: your idea, your process, your end result. Technology escrow is not the only solution for managing intellectual property assets—it’s just one method—but it is part in parcel to a comprehensive solution for protecting intellectual property.
About the Author:
John Boruvka, vice president for Iron Mountain’s intellectual property management business unit, has been involved helping companies create solutions relating to protecting intellectual property assets for more than 20 years. For more information, visit: www.ironmountain.com/ipm
