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Along with websites, e-newsletters, and social media, in today’s digital-everything world, many companies now have their own mobile apps. In fact, some companies’ primary digital platform is their mobile app. And as smartphones, iPads, e-tablets, and other mobile devices become more popular, having an app may soon become as ubiquitous for businesses as having an email account.
While coming up with a unique idea for your company’s app and finding a developer who can bring that idea to life are among the most crucial aspects of app development, creating an app also involves several critical legal issues. Indeed, many of the legal issues related to app development are so important, if you don’t handle them properly, not only your app, but your entire business could be put in jeopardy.
While you should work with us, your Family Business Lawyer™ to help ensure you’ve covered all of your legal bases when developing an app, here we’ll discuss a few of the most basic legal concerns related to app development. Keep in mind, depending on your business and the type of app you create, you may encounter many more legal issues than those covered here.
Intellectual Property Protections
Depending on whether you do the work of building your app in-house or hire outside help, your company is likely to have a number of different types of intellectual property (IP) that will need protection. And given the variety of IP that’s likely to be at stake, you should consider securing a broad spectrum of IP protections, including some or all of the following protections: trademarks, copyrights, and patents.
Trademarks: Trademarks protect words, phrases, symbols, designs, and other distinguishing features that help identify a particular product or service as yours. To this end, you’ll almost certainly want to trademark your app’s name. And if your app features a logo, slogan, or other distinguishing brand identifiers, you’ll want to trademark each of those features as well.
You can register for trademark protection with the U.S. Patent and Trademark Office (USPTO). Although you can register a trademark on your own or with the help of a cheap, do-it-yourself (DIY) trademark registration service, the registration process can be highly complex, and sometimes it can take up to a year or more to complete. Given this, you’d be much better off working with us, as your Family Business Lawyer™, to help you file your application for which we charge a flat fee, agreed to in advance, so there are no surprises.
Copyrights: Copyrights protect a wide array of original creative works of authorship. While most people associate copyrights with written works, art, films, photos, and music, your app will likely contain several different features that require copyright protection. For instance, you’ll definitely want to secure a copyright for the app’s source code, which is one of the app’s most crucial elements.
Additionally, you may also want to get copyrights for any unique graphics, videos, music, or other creative features contained by your app. To ensure you have the maximum level of copyright protection for your app, you should have us, your local Family Business Lawyer™ review your app’s design and specifications, so we can identify and help you secure all of the necessary copyrights.
Patents: Patents protect inventions, and while most of today’s mobile apps don’t qualify for a patent, it’s possible that your company’s might. This is especially true if your app performs some highly unique function or features some brand new technology. To determine whether or not your app is eligible for patent protection, consult with us, your Family Business Lawyer™ or a lawyer who specializes in patent law.
Secure IP Ownership With Legal Agreements
Depending on whether you hire an outside developer to create your app or have your own team do the work in-house, you’ll need to take steps to ensure you actually own all of the IP contained by the app. In either case, you’ll need to have legal agreements in place to secure IP ownership.
We’ve seen far too many incidents of business owners hiring friends to create their app without an agreement, and the subsequent loss of their source code, when it turns out the code was owned by the developer, not the business owner, is often a huge surprise for them. And yes, that’s what’s true—and what can happen to you—if you don’t secure your IP ownership with a legal agreement before you create your app.
Independent Contractors: If you hire an outside developer to help you create your app, it’s crucial that you work with an experienced business lawyer like us to help you create an app development agreement that gives you full ownership of all IP the developer creates for you. Unlike employees, with whom you generally own automatic copyrights to everything they produce while working for you, an outside developer will likely be considered an independent contractor, and as such, he or she will typically retain full copyrights to their work, unless they’ve signed an agreement stating otherwise.
To this end, if you don’t have a legal agreement in place or you use a generic, DIY agreement from an online document service, you could find that you don’t actually own the IP, such as the source code and other key components, contained in the app you paid the developer to create for you. Fortunately, with our support and guidance, it’s fairly easy to secure full ownership of the IP contained in your app using the proper agreements.
Just be sure to have the developer sign the agreement(s) before he or she starts any work on the app and even before you share any ideas about the app with anyone outside your organization. If not, it may be too late to acquire full ownership.
Employees: If you are using your own team to create your app, you generally own all of the IP employees create while working for you. However, you should still ensure that every team member working on the app has the proper work-for-hire, copyright-assignment, and invention-assignment provisions within their employee agreements. As your Family Business Lawyer™, we can help ensure your employment agreements offer you the maximum level of IP protection. Before you start working on your app, let us review your current employment agreements to make sure you have all of the proper provisions in place.
Finally, in addition to having legal agreements that give you full ownership of the IP contained by your app, you should also ensure that any confidential or proprietary information that comes up during the development of your app is also protected by the proper agreements. This will typically be accomplished by having employees, contractors, and any other parties who work on the app—or even have knowledge of the app’s design—sign confidentiality agreements and/or non-disclosure agreements.
As with the IP, these agreements should be signed before any work begins or you even share any sensitive information about the app and its design with others. As your Family Business Lawyer™, we can ensure you have the proper agreements to protect all of the sensitive information that might go into creating your company’s app.
End-User License Agreement
Most of today’s apps come with what’s known as an “end-user license agreement” (EULA), which is similar to a website’s terms of use. A EULA is a legally binding agreement between your company and the users of the app. Basically, a EULA outlines the scope of the license granted to the user, which is typically just a limited and non-exclusive right to download and use the app. The agreement also clarifies the terms and conditions under which the user may use the app, identifying what’s acceptable use and what’s not.
In addition to limiting your company’s liability, the primary purpose of the EULA is to help ensure users aren’t misusing the app, especially in ways that might jeopardize your ownership of the IP contained within the app or otherwise related to the app. Your EULA should make it clear that by downloading your app, the user is agreeing to be bound by the EULA. In short, users must be given notice of your EULA’s terms and then agree to them.
You can obtain a user’s agreement to be bound by your EULA in a few different ways, but typically the most effective method is what’s known as a “Clickwrap.” In this method, you obtain the user’s assent by having them check a box or click an “I Accept” button to confirm they’ve read and agree to accept the terms of the EULA before they can download and use the app.
Privacy Policy
If you collect any personal data from your app users, such as email addresses, phone numbers, or credit card information, you need to include a privacy policy that outlines what data you collect, how it’s collected, and how you plan to store, use, and protect the data. In some cases, your privacy policy may be included as part of your EULA or run as a separate, stand-alone agreement.
In certain cases, you may actually be legally required to have a privacy policy for your app, especially if you collect banking or credit card data. In any case, your privacy policy should not simply be a generic template form or one copied from another company; it should accurately describe exactly how your company collects, stores, uses, and protects your users’ information.
As your Family Business Lawyer™, we can help you create your app’s privacy policy or review any existing privacy policy you may have, even if it was drafted by another lawyer. We can also advise you on the different state and federal laws governing your privacy policy.
Don’t Do-It-Yourself
As mentioned earlier, these are just a few of the basic legal issues involved with app development. This is by no means an exhaustive list of every issue you might encounter. And whether it’s securing the necessary IP protections or creating the different legal agreements outlined here, it’s highly recommended that you don’t try to go it alone or rely on DIY legal documents you find online, and instead, always work with an experienced business lawyer like us.
As your Family Business Lawyer™, we will support and advise you step-by-step through the process of securing the different IP protections, like trademarks and copyrights. At the same time, we will also help you create all of the necessary legal agreements to ensure that you own all of the IP related to your app, and all sensitive or proprietary information associated with the app is as secure as possible.
Finally, we can also help you enforce your ownership rights should your app’s IP ever be infringed upon. With the help of us, your local Family Business Lawyer™, you can rest assured that your IP will not only be well protected, but we can also support you to maximize the value of not just your mobile app’s IP, but all your company’s intellectual property assets. Contact us today to learn more.
This article is a service of Deloso Penacho Law, PC, Business Strategy and Estate Advisor. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule. CLICK HERE TO SCHEDULE!