Software Escrow Provisions In Agreements

Most technology-related contracts have provisions that seek to protect the seller or licensor's intellectual property rights. These provisions usually contain clauses prohibiting reverse engineering, derivative works, or copying software. It is generally true that most software is not sold; it is simply licensed to the licensee to use for some certain amount of time. What happens if the licensee relies on the software to run its business and the licensor breaches the agreement (due to, for example, insolvency, willfulness, or some other reason beyond its control)? In theory, the agreement will likely terminate, and thus the license to use the software terminates as well. This could create a serious burden for the licensee.