K&L Gates senior associates’ Shehana Wijesena and Amanda Hutchings explore the legal issues around developing and commercialising an app.
The ever expanding functionality of mobile apps has made shopping through mobile devices an all day, every day reality.
From Donna Karan to Chanel to Louis Vuitton, entrepreneurial fashion labels are embracing this technology to engage new and existing customers through digital means, enabling them to boost the marketing, brand awareness and sales of their garments.
While neither brands or users want to be bogged down in legal jargon when developing and commercialising an app to promote and sell garments, there are some key legal issues to keep in mind to ensure you avoid any pitfalls.
Your terms of use
Your terms of use or “End User Licence Agreement” form the agreement between you and the users of your app.
This is the way in which you can govern how the app may be used and seek to limit your liability (to the extent permitted by law).
Terms of use should be tailored depending on the operation of your app and the jurisdictions in which it operates.
Ownership of copyright in the app
If the software code for the app was written by an employee of your organisation during the course of their employment, it is likely that you will own the copyright in this code.
However, if the code was written by a contractor, the copyright in the code will be owned by them until they have assigned it to you in writing.
This is the case even if you have paid for the work to be done.
If you need to own the code in the app (which is recommended), it is crucial that you enter into a written agreement with the contractor assigning you all copyright in the code for the app.
Otherwise you will have little recourse if the contractor uses the code for other clients.
Software development agreement
If you use a contractor to assist you to develop the app, as well as addressing copyright ownership and what uses of the software code are permitted, your software development agreement should also detail how the app will be developed.
Things to consider during the development phase include the specifications for the app, details of the material that you will provide the contractor to develop the app, and timeframes for delivery of the app.
If the contractor uses open source code, third party content or application programming interfaces (API) to develop the app, you would also want warranties (and corresponding indemnities) from the contractor that they have abided by all laws and licence conditions when using and incorporating this code, content and API within the app.
Open source code
Although open source code is made publicly available, you must still adhere to the terms of the licence agreement governing use of the code.
Non-compliance with these licence terms could expose you to liability for copyright infringement.
If you are considering incorporating any open source code in your app, you should ensure that you can comply with such licence terms.
API terms of use
If you are using a third party API in order to imbed certain functionality into your app (eg Facebook), you must do so in accordance with the third party developer terms.
Third party API terms may contain excluded uses in relation to, amongst other things, the way data is presented on the app.
Trade marks
Whether you use your label name or a unique name to brand your app, you should obtain trade mark registrations for your app’s name in the countries in which it will be made available.
This will protect you against competitors who wish to capitalise on the goodwill and reputation associated with your app and your brand.
If you decide to give your app a name which is different to your label name, it is advisable to conduct trade mark availability searches before settling on a name to prevent exposure to claims of trade mark infringement.
Third party content
You should make sure that you have obtained the appropriate licences to incorporate third party content such as images, text, videos and music in your app.
If you don’t have permission to use such content, you may be exposing yourself to liability for copyright infringement.
Privacy
When someone uses your app, it is likely that they will provide you with personal information, such as their name and email address.
Privacy laws in various jurisdictions may require that you collect, use, store and disclose this personal information in a prescribed manner, and that you specify the manner in which you plan to collect, use, store and disclose this personal information in a clear and up-to-date privacy policy.
A breach of privacy legislation can have significant legal and reputational backlash.
App store terms and conditions
Once your app has been accepted for use on a mobile device, it will be subject to the terms and conditions of the app store through which you will distribute your app (eg Apple’s ‘iOS Developer Program Licence Agreement’).
These terms and conditions relate to the function and marketing of the app and are in place to ensure that apps are reliable, perform as expected and are free of offensive material.
These terms and conditions should be reviewed early in the development phase of your app, as they may contain conditions which affect the design of your app.
If you agree to the terms and conditions of the app store, and your app does not comply with these terms and conditions, your app may be withdrawn from the app store, making the time and expenditure invested in developing your app fruitless.
Above all, an app needs to best service your customers’ needs without threatening the integrity and identity of your brand.
Protecting yourself in the ways outlined above, through the development and launch stages of your app, will ensure you minimise your exposure to risks and maximise the potential return on your investment.