Successfully launching an app can easily allow you to reach a large Australian and international customer base. However, the widespread use of your app means there are various regulatory and business concepts, as well as legal documents, for you to familiarise yourself with. If you consider these from the outset and plan in advance, you could save time, money and avoid potential disputes. This article explores the key considerations for your startup as you are developing a mobile app.
Developing the App
An idea for a mobile app is only as good as you are able to execute it and turn it into a working app. Typically, most mobile app startups will firstly create a minimum viable product to test the market, being a first iteration of the app. This will require some level of development.
Developing a mobile app can require varying levels of financial support or investment. If your startup requires external capital, you should consider how you intend to raise funds. You can fund your app by obtaining a loan or by investment from another person or company.
For most mobile app startups, app development will either happen in-house or externally. Each of these approaches requires different considerations to protect your product and interests.
1. Within the Company
If your app is being developed within the company, you need to ensure your startup owns the final product. Therefore, you should have the person developing the app sign a contract to assign the intellectual property (IP) of everything they create to the company. This means you will be the complete owner of the IP of the product.
If your startup doesn’t expressly provide for this in an agreement, you run the risk of the developer becoming the legal owner, which would cause issues for you in the future.
2. Outside the Company
Many local and offshore companies have the technical capabilities to build your the app. However, before discussing your app with any third parties, you should consider having them sign a non-disclosure agreement (NDA). An NDA will ensure your discussions are kept confidential and prevent the other party from using or disclosing your idea.
Importantly, when engaging a third-party developer, you should ensure that everyone is on the same page about what is being developed and the features and tools to be included within your mobile app.
Any third-party developer should be engaged using a formal development agreement to explicitly set out and define your expectations and key terms of the engagement. Additionally, this agreement should clearly assign all IP to your startup to ensure your ownership of the app.
Protecting Your IP
Further to owning your app’s IP, there may be other aspects of your app you can protect. These IP protections include:
- copyright, which arises automatically in Australia over the creative expression of your works. This will protect your app’s code and design if another company attempts to reproduce these elements;
- trade marks, which give you exclusive rights over your brand. Your startup should consider registering its name and logo as trade marks to distinguish your work; and
- patents, which protect new and inventive works. However, patenting mobile apps can be difficult unless some feature makes it incredibly unique.
You should consider carefully which of these forms of protection might be useful in protecting your app’s IP.
Once you have completed development of your app, you should prepare terms and conditions to govern your relationship with the customers. These terms and conditions should set out:
- rules governing how customers may use your app;
- the relevant payment or subscription terms;
- clauses to protect your IP; and
- clauses to limit your liability.
You should require your customers to accept these terms and conditions before they can use your mobile app. Having a well-drafted set of terms and conditions is particularly helpful if any future disputes arise with your users.
Recent changes to the laws in the European Union (EU) may also impact your business. If your startup has any operation in the EU or collecting personal information from individuals in the EU, you may need to comply with the General Data Protection Regulations (GDPR). You should consider whether the GDPR applies to your app, as you may have additional responsibilities as a result.
If you are running a startup which is developing a mobile app, you should begin considering:
- the development process, including whether you will develop the app yourself or contract with a third party;
- protecting your IP and whether you can make use of copyright, trade mark or patent protections;
- customer contracts; and
- complying with the relevant privacy regulations.
If you need assistance with drafting or reviewing legal documents when building a mobile app, get in touch with LegalVision’s IT lawyers on 1300 544 755 or fill out the form on this page.
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