Mobile App Legal Considerations

Today, software developers, web-based businesses, and other new and social media companies have been focusing their energies on developing mobile applications to diversify their revenue streams.

Daliah Saper first lectured to businesses pursuing mobile applications in March of 2010 when she presented to Day of Mobile conference attendees. She has also provided variations of this lecture to the Chicago Bar Association and at Mobile Tech Cocktail . Some highlights from Daliah’s presentations to entrepreneurs and established businesses are outlined below:

Clearly define the ownership rights

No matter what business entity under which you decide to operate, make sure you know who owns the rights to your app. If you are a sole proprietor, and you are the only one writing the code, then the answer to this question is easy –it’s you! However, if you hire freelancers, use open source code, or operate as a general partnership, multiple member limited liability corporation (LLC), or corporation (Corp), then you will need carefully drafted contracts to properly define who owns what.

Starting any business can lead to problems without clearing up rights as to ownership. For example, does the business itself own the rights to the app, or do the partners own those rights as co-owners? In U.S. copyright law, co-owners or joint-authors each hold an undivided share in the copyright. Co-ownership may restrict some ownership rights, such as the right of survivorship; if a co-owner dies, then ownership interest in the copyright passes to the deceased’s heirs, rather than the other co-owners.

The key to successfully developing and quickly profiting from your app is to clearly define your ownership rights. Once that is settled, you can tackle more substantial business decisions, such as licensing, sales, and joint ventures.

Protect your work

You have put a lot of hard work into developing your mobile app, so protect it! One important way to protect your work is to trademark your app’s name, and copyright your app’s software.

A trademark is a distinctive sign or symbol that is used to identify your app, and distinguish it from similar or competing products. You will have a common law trademark as soon as you start selling your app, but a federally registered trademark will allow you to protect your app’s name anywhere in the United States, even if you have not yet started transacting in other states.

A copyright protects an original, creative work fixed in a “tangible medium” (that is to say, you have to be able to read it, see it, or hear it). As soon as you meet these requirements, you enjoy exclusive rights to reproduce the work, prepare derivative works, distribute copies, or display the work publicly. However, officially registering a copyright for your app provides additional benefits as well. If your work is infringed, registration will not only protect the rights inherent to your work, but also make you eligible for statutory damages up to $150,000 and attorney’s fees.

But remember, you can only register a copyright for the original elements of your app that you have authored. Any code that you have licensed (including open source code) cannot be copyrighted.

Follow the rules

Now that your app is ready for launch, be sure that you have access to the launch pad. Online stores like Apple’s App Store and the Android Market are key distribution centers for online applications, but you must abide by their policies in order to use them.

A common policy you will likely find in every app store is that your application shall not infringe on the intellectual property rights of others, meaning that you cannot incorporate or copy the trademarks, copyrights, or similar rights of any other person. If this policy is broken, your app will not only be banned from the app store, but you also open yourself up to lawsuits from the original owners.

If you have any questions about the legal issues affecting mobile application developers just schedule a call with us by calling 312.527.4100 or visiting www.saperlaw.com to set up an appointment.