The use of mobile phone apps is exponentially increasing. You look down at the neatly ordered icons on your smartphone, and then you have an idea. An App where you can swipe left and right on real estate, and match with sellers. You discuss the idea with colleagues, your hairdresser, and your barista. You brainstorm names over brunch with friends. You contact developers. But before you plan an elaborate social media marketing strategy to launch your App, creatives and developers need to be aware of the legal framework. This article will detail the legal considerations involved in developing an app.

Non-Disclosure Agreements (NDA)

When discussing your idea with potential investors and developers, you may consider asking them to sign a Non-Disclosure Agreement (also referred to as a confidentiality agreement). An NDA typically includes a promise not to divulge certain information. It generally facilitates communications with a third party before you formally enter into a contract. The foundation of business partnerships is, however, mutual trust and in honing your pitch, practice talking about your idea with others without disclosing its secret sauce. It is best first to speak with a lawyer to determine when an NDA is appropriate.

Protecting your Intellectual Property: Copyright

Before launching your App into the public domain, it is prudent to consider formal Intellectual Property protection. Your App will automatically attract copyright protection if you can demonstrate you are the owner of the creative works. You are also able to register your App’s name and logo with IP Australia through trademarking.

Writing down your idea, or drafting sketches can assist you in researching your App. They can also assist in demonstrating that you own the App’s copyright when pitching your idea to investors and developers. The moment you document your idea, either on paper or electronically, it is automatically protected by copyright under the Copyright Act 1968. Copyright protects Mobile Apps as a type of “literary work.”

What isn’t protected by copyright?

Copyright protects the particular way in which an idea is expressed. It will not prevent developers from independently coming up with their own app or software that does the same thing. Copyright then does not protect your App’s function, and it does not protect the name or title of your App.

How do you get copyright protection?

Copyright protection is free and automatic in Australia. Your idea is protected as soon as you save it to file, write it down, or put it in some material form. Although the copyright notice (that is, © LegalVision 2015) is not required for protection, it is still a good idea to have this notice on your App. It notifies others that the App is protected by copyright and lets others know who to contact for copyright-related inquiries.

3rd Party Material Use in Your App

Mobile App’s may use 3rd party material such as images, photographs, music or video clips, and each may be protected by copyright. It is important to make sure that you have obtained permission from the copyright owner of the material to use in your App.

Protecting your Intellectual Property: Trademark

Culling your long list of App names can be a painstaking and arduous process. You said tearful farewells to “Matchbox” and “PropertyPal” before deciding upon “EstateMate.” It is sensible then to trademark your App’s name and logo by registering with IP Australia. A trademark is a way of identifying a unique product or service and distinguishing your goods and services from someone else’s.

Preparing your Trademark Application

You must first provide a description of the goods and services upon which you intend to use your trademark. ATMOSS is an excellent tool that allows you to search pending or registered trademarks in Australia and confirm whether there are any identical trademarks for your App’s name. Mobile App’s are likely to require two classes, Class 9 and Class 42 for software design and development.

Generally, trademarks take 3 to 4 months to examine from the day your application is filed. If your Trademark is accepted, you must pay a fee to register. If you do not use your Trademark in the course of trade, it may be removed for non-use.

App Developers Agreement (ADA)

An ADA sets out the rights and obligations of each party. Typically, an ADA will set out what the client needs the developer to do, including timelines and payment terms. Other points addressed in an ADA include:

  • The procedure if a client needs to make alterations or requires additional services;
  • How to test the final product to ensure the App meets the development specifications; and
  • Confidentiality clauses directing both parties only to use the confidential information for its disclosed purpose

When you engage a developer in coding your App idea, the default rule is that the creator of a work is the first owner of the copyright. Generally, this is the developer who wrote the code. It is then important to clearly state who will own the App’s copyright and what uses the other party may make. Having an ADA in writing to which parties may refer can help in avoiding future disputes.

License Agreement

Most commonly, if you commission someone else to develop your App, you will unlikely own the copyright and will then need a license to use the App. A License Agreement will set out what permissions the copyright owner has given regarding the way that the App including any other accompanying material is used. This includes text, graphics or typeface designs. The App developer is generally the licensor and the other party who wishes to use, but not purchase, the App is the licensee. If you are the developer, it is up to you as the App’s copyright owner to decide what type of license you will give to users. For instance, is the App intended for commercial use or free distribution?

App Stores and Agreements

Each App store may have its own Terms and Conditions that you will have to agree to before an App can be sold through this platform. You must make sure that you understand the licenses of each platform. App store licenses generally cover:

  • How many devices an App can be installed on;
  • How many copies of your App can be installed at a particular time; and
  • Revenue sharing

Pay special attention to clauses that determine what rights purchasers and the App store are given. It is sensible to have these Agreements reviewed by a lawyer before you sign.

App Terms of Use

Your App’s Terms of Use will protect you and your business. It is the agreement between yourself and your user. These differ from the App Store’s Terms and Conditions, which exist to indemnify them from any of your customers who are unhappy or experience problems with your App.

Your App’s Terms of Use should generally include:

  • The services you will provide;
  • The purpose and conditions attached to users using the service;
  • Intellectual property protection;
  • Warranty disclaimers limiting risk from your App not working properly or being misused; and
  • Indemnity clauses as well as limitation of liability

You may also incorporate a Privacy Policy in your App’s Terms of Use. This outlines and clarifies what you do with any information that you collect and how it is stored. Including a Privacy Policy in your Terms of Use gives users confidence that the information they provided is secure.

Conclusion

Developing a Mobile App can be an exciting and profitable venture. You will most likely spend your time conducting market research, perfecting your sketches and crafting your pitch for investors. It is important, however, that you spend equal time and energy familiarising yourself with the legal framework and documents before you begin.

Questions? Get in touch with LegalVision’s business lawyers on 1300 544 755.

Claudette Yazbek

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