You might think that creating a mobile app is just a matter of pairing a good idea with a good developer and then amassing users. While those are important things, they’re not all you have to think about. There are a number of legal issues that arise for businesses developing a mobile app, some of which, if not handled properly, can jeopardize the whole enterprise.
These issues include, but are certainly not limited to, the following:
- Intellectual Property
- Privacy Policies
- End User License Agreements
- App Store Agreements
Let’s start with arguably the most important legal concern when building a mobile app—intellectual property ownership.
Intellectual Property
IP Categories
The standard categories of intellectual property are: copyright, patent, trademark, and trade secrets. Each of these categories is implicated when creating a mobile app.
Copyright
To qualify for copyright protection, a work must be original and in a fixed form. While the average person may associate copyright with novels and feature films, copyright protection in fact extends to a broad array of creative expressions. This includes many features found in a typical mobile app, like software code, images, graphical user interface, and more.
Patent
A mobile app may have a patentable component to it for certain processes or methods embodied in the app. Patents occupy their own legal world, though, and so if you are interested in learning more about whether a process or method in your mobile app may be eligible for patent protection, you should consult with an attorney who specializes in patents.
Trademark
Trademarks are source identifiers for particular products or services. They often include things like company names, logos, and slogans. The name, logo, or slogan associated with the mobile app may therefore be eligible for trademark protection. Most companies building mobile apps take steps to register at least the name of the mobile app as a trademark.
Related: How To Register A Trademark [Step-by-Step]
Trade Secrets
Trade secrets, as a category of intellectual property, is less clearly defined than the others listed above. Nevertheless, certain key elements of a mobile app, notably the source code, will often be protected as a trade secret.
Related: IP Rights In Software Development Agreements
IP Protection
To ensure that key IP contained within the mobile app remains protected, there are a number of steps that a careful entrepreneur will take. Typically the most important step is to ensure that the company will actually own the IP contained in the app.
In the case of hiring an outside developer to help build the app, it’s critically important that the company work with a lawyer to draft a detailed mobile app development agreement, with a particular focus on the IP ownership provisions. Mobile app development agreements are not one-size-fits-all kinds of contracts. Failing to put together this agreement properly can result in the developer unintentionally owning key parts of the IP, rather than the company, creating an untenable situation.
In the case of a company using its employees to help build the app, the company must ensure that they are subject to “work made for hire” and invention assignment agreements within their employment agreements. This helps to avoid the similar situation when working with an outside developer but with employees.
Related: Work Made For Hire: Who Owns The Copyright?
Related: Who Owns An Employee’s Inventions In Washington?
In addition to using agreements that articulate who owns what IP within the mobile app, it’s also important to use confidentiality agreements so that contractors, employees, or other parties with knowledge of the mobile app are prohibited from sharing what they know with others, most notably potential competitors. This should be done before the company reveals any sensitive information to the developers who will be working on the mobile app.
Related: Non-Disclosure Agreements In Washington State
IP Licensing
Sometimes a mobile app will contain IP that is owned by someone else, a third-party, in which case the company developing the mobile app will likely need to obtain a license to use that IP and to incorporate it into the mobile app.
In some cases, there already may be a licensing agreement in place. But if there is not, the company will need to negotiate and draft a licensing agreement that gives them the rights needed in connection with the licensed IP to effectively integrate it into the mobile app. Licenses can vary dramatically in scope and so it’s important for the licensing company to have a very clear understanding of what rights they have and what rights they do not have in connection with the licensed IP. A lawyer can be an invaluable help here.
Privacy Policy
While IP is often the focal point in the legal strategy for creating a mobile app, privacy rights—specifically, the privacy rights of end-users of the app—should not be overlooked.
Related: Privacy Policies
The primary way of addressing privacy rights of the mobile app’s users is through a privacy policy that articulates what information is collected, how it’s stored, who has access to it, and much more.
It’s critically important that the privacy policy serve not merely as an aspirational document, but rather as an accurate depiction of how the company actually deals with privacy. For that reason, using a template privacy policy borrowed from another business is about the worst thing a company could do. In many ways the company would be better off having no privacy policy at all, though note that the major app stores require apps on their platform to have a privacy policy.
End-User License Agreement
As with privacy policies, the major app stores require apps on their platform to have an end-user license agreement (or “EULA”). The EULA is a contract between the company that owns the app and the users of the app.
It typically spells out the scope of the license granted to the user, which is usually a limited and non-exlusive right to download and use the app. It also sets out the terms under which the user may use the app, usually identifying permissible and impermissible uses.
The goal with a EULA, in addition to attempting to limit the liability of the app owner, is to ensure the user isn’t misusing the app, particularly in a way that is harmful, including in a way that could jeopardize the company’s ownership of the IP embedded in or otherwise connected to the app.
As mentioned, a EULA is a contract between the company that owns the app and the users of the app. Like with any contract, the EULA needs to be enforceable in order to have any value. To be enforceable, most contracts require mutual assent, meaning that the app user needs to agree to the EULA. The most effective way to obtain user assent is through use of “clickwrap”—that is, provide the EULA to the user, require the user to affirm they have read the EULA and agree to its terms, and then necessitate the user clicking an “I Accept” (or the like) button in order to use the app.
App Store Agreements
The major app store operators will require the company to enter into an agreement in order to make use of the app store’s platform for distributing their mobile app. These agreements tend, unsurprisingly, to be beneficial to the app store. While it’s important to review these agreements carefully, in most cases they’re not meant to be negotiable and so the company may be forced to forego using a certain app store for distributing the mobile app if they have serious problems with the app store agreement.
Takeaways
This is by no means an exclusive or exhaustive list of the legal issues you may encounter in developing and distributing a mobile app. But it should prepare you to keep an eye out for some of the bigger issues so that you can work with a good lawyer to make sure you don’t get tripped up.
