App Development: The Three “Big Legal Aspects”

There are fortunes to be made in mobile app development–a fact that not only you most assuredly understand, but as do your friends, family, and all of Silicon Valley. The chilly truth of this and any other competitive market is that “good” ideas may not be enough, you need great ones. And, when you have a great idea, you’ll want to already be armed with an understanding of the three “big legal aspects”, which can be summed up roughly as: (1) your intellectual property; (2) your contracts; and, (3) your overall business strategy.

With a firm grasp on how these things impact your legal landscape, you’ll be well on your way to safeguard yourself from intellectual property theft, infringement, or lawsuits.

App Development “Big Legal Aspect” 1: Your Intellectual Property

All the things that make your app what it is are forms of intellectual property (“IP”). That means: your ideas, concepts, code, sounds and artwork (the “assets”), branding and good will, general know-how, and more. Accordingly, your IP is your most valuable commodity.

Different aspects of your app are protected by different IP laws.

Trademark law protects the name or logo of your app (your “brand”) under which you sell all the goods and services associated with the app. Think about in-app purchases, clothing and apparel bearing the name or logo, signage, domain names, etc. Your trademark needs to be policed properly to ensure no one else is capitalizing on the good will of your brand, and varying levels of registration afford you different rights. This link will get you started understanding the basics of trademark protection, but don’t endeavor to register without the assistance of licensed counsel. You can also register at solely a state level, but with apps, the likelihood you’re not going to put your trademark on goods and services in interstate commerce is highly unlikely (generally they’re offered to everyone over the Apple or Android store and hence “interstate”–multiple states).

Copyright law protects the creative aspects that comprise your app. These are things like the original artwork and sound (the “assets”), the code, etc. Copyright law also confers you the right to make derivative works based on the original (in the event of a game, think, “Part 2”). You need to make sure you register with the U.S. Copyright Office before any issues spring up, as you may only sue in the event your Copyright is registered. In the event that you register to sue after infringement has occurred, you will only be entitled to sue for “actual damages” (basically the amount you can prove you “actually” lost financially based on the infringing act), whereas, had you done your due diligence and registered prior to an infringing act, you potentially stand to recover what’s known as “statutory damages” (go check the money figure for “each instance of willful infringement” and thank me later).

Finally, in some circumstances–in the event you have something so revolutionary, so new and unique–you may want to consider a patent. However, this is rarely the case, as a recent Supreme Court decision makes clear, because it needs to be an “original, innovative idea”, a genuinely “new” way of doing something (and that doesn’t mean just a way of doing something in a digital format). We’re talking here about Facebook-esque breakthroughs in technology.

Familiarize yourself with these IP concepts and endeavor to educate yourself as much as possible if you’re serious about your app.

App Development “Big Legal Aspect” 2: Your Contracts

From licensing the use of your IP in the app to ensuring you’re shielded from lawsuits, your contracts matter… big time. You may not bother to read the terms of service (“TOS”), end user license agreements (“EULA”), or the privacy policies you agree to every time you interact with someone else’s app, but they are very important, and you’re going to want each of these items to be iron-clad if you’re serious about your app.

Your TOS is basically a set of rules that governs what manner of behavior people should have when interacting with your app. Note that while I provided a link in the preceding sentence, I am NOT encouraging you to use this to create a final TOS by any means and merely have included it for the sake of example and education. A TOS should always be narrowly tailored to your particular fact scenario based on your own unique app. For the sake of simplicity, an EULA is essentially the same thing as a “TOS”, with only a bit more nuance as to use and access to the software (think: we’re licensing use of our software to a user, and if they don’t like it, that license ends).

The other area of paramount contractual significance for app developers is the privacy policy. These days, everyone who is developing an app is collecting some manner of data from their users, from credit card information to addresses, etc. This is even more significant in the event that you are intentionally or inadvertently collecting information from minors. This is something you should never compile out of “boilerplate” or “stock” language you find online, as there is nothing “boilerplate” or “stock” about the particular data your unique app collects; again, it must be narrowly tailored to fit your needs.

If you have a great, groundbreaking idea, you simply cannot wait to get your contracts air-tight. If you use a bunch of non-custom language in your agreements with your users, you can bet that when you have millions of them, one will be pissed enough (or just out to take a cut of your wealth) to hire an attorney who finds an issue with it. This has to be done before launch day, period.

App Development “Big Legal Aspect” 3: Your Business Strategy/Gameplan

The final aspect of concern to app developers should be the overall business strategy and management of their assets moving forward.

Consider the following questions that apply to the business side of things:

  1. “Do I have work-for-hire agreements in place for those I’ve asked to help me to develop my app?” If not, these ought to be put in place to make sure no one else can claim, without your permission, part ownership of your Copyrighted material.
  2. “Do I have a business entity established to handle my assets separate from my own?” If not, go forth and establish a business under which your app is sold, as if someone brings a lawsuit against you without having done so, you could end up with your personal finances at stake.
  3. “Do I have any non-disclosure agreements (“NDA’s”) in place?” If not, you may risk an employee walking off with your intellectual property they’ve received access to. These can save you a tremendous headache.
  4. “Have I fully understood the terms of the programs I’ve used to develop my app?” If not, read them or have your attorney do so. Programs like Unity and other popular development tools have their own TOS/EULA and contemplate the collection of data when you use them (via their very own privacy policy) . These can conflict with the terms you establish for your users, and again pose a reason why the language of your contracts needs to jibe to meet these kind of specific circumstances which will be custom to you.
  5. “Do I understand which marketing tools I’ll need, stores (i.e., Apple and Google) I should use, what I can realistically expect from those things? Furthermore, do I understand the terms of service I’m agreeing to in using any of the above?” If not, again, go forth and do so or have your attorney help advise you.
  6. “Have I set up the proper security measures to ensure that my customers’ data won’t be stolen?” If not, you may end up like Home Depot facing a multi-million dollar class action.

If you’re an app developer, you’re a smart person undoubtedly. Don’t do yourself a huge disservice in failing to regard all of the above as things necessary for the success of your app.

In Closing

Of course, there’s a lot to take in and consider when developing your app from a legal perspective, but any successful app developer should have some basic understanding of the above “big three” areas. This will help put you on the road to success and get you moving forward in the right direction, preempting myriad issues along the way.

Best of luck, and don’t hesitate to contact me with any questions you may have.

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