Legal Pitfalls of App Development

Before you start the development of application there are many questions to be answered. Most of them relate to the software development process itself, but there are a few that relate to the legal side of mobile app development.

Legal Issues to be Concerned by Future App Owner

NDA. We always encourage our customers to sign a non-disclosure agreement prior to discussing their app idea. This document will secure your confidential information that has economic value.

App Development Contract. This document is important for both app development company and customer. Contract has to clearly define the scope of work or services, time limits, fees arrangements (fixed, time&material or mixed), code ownership, whether to use open-source software, etc.

Entity Formation. It is often advised to establish LLC prior to starting app development. That way app owners could limit their liability if any problems arise. While entity formation is a common step among entrepreneurs, there may not be necessary if you’re developing an app for personal use.

Intellectual Property Ownership. There are two aspects that one should consider during the app development: protection of own copyright and not infringing third-party copyright.

You can protect your intellectual property by:

  • Trademark that identifies the source of origin of goods or services. Trademark is used to protect your app’s name and logo.
  • Copyright protects app’s source code, artwork, design, text. The app automatically gets copyright protection once the work is done. In addition, you can file a copyright application to the US/EU/GB Copyright Office in order to establish a public record.

Registration is required in order to be able to bring a lawsuit in the federal court, but usually one needs to apply in each country he/she wants protection in. Therefore, global registration may not be necessary in case you’re not Apple. Take your time to create a profitable app first.

  • Patent is used to protect specific app mechanism or service that is new or not obvious. It must be acknowledged that patenting is rare practice among app developers.

Third-party Intellectual Property Ownership

Copyright. Apple and Google strictly prescribe the use of third-party materials and carefully protect intellectual property rights. Laws (and app laws) differ in different countries but fundamental rules are common across all app stores.

Apps should only include images, music and texts you have right to use. If you have been granted access to use assets owned by others you can notify Google Play Market view team using advance notice form or just sending a cover letter while applying to Apple’s Store.

Encouraging copyright infringement. There may be a possibility that your app allows users to stream or download copyright protected materials. In such situations, you should get a legal advice concerning your specific issue.

Restricted content policy. Review your app and store listing page for any restricted content, such as adult content, violence, or drugs. You can check out all rules on Google Restricted Content Policy page.

Note: This regulatory requirements may also refer to ads inside your app, so be careful choosing your future ads provider.

User-generated content. Any app that contains or features user-generated content (UGC) must take additional precaution, such as reporting system, correct categorization, and IARC ratings.

DMCA. While you’re obliged by app stores to maintain “moral ground” inside your app, there is Digital Millennium Copyright Act (known as the Online Copyright Infringement Liability Limitation Act) that exempts from direct and indirect liability of Internet service providers and other intermediaries.

Meaning you’re not liable for copyrighted or inappropriate content spreading across your media resource if you’re registered as a designated agent, take action to remove infringing content and ban offenders.

Fixing. There is always a possibility that your app won’t pass the review from the first time. Usually, those problems can be easily fixed. For such cases, we’re providing afterdelivery maintenance in order to help you during registration process, and make adjustments according to the user’s and stores’ feedback.

Collecting User Data

If you’re collecting user data, you need to include a privacy policy in your store listing and in your app. The privacy policy should inform users what data you’re collecting and why. Here’s Google Play privacy policy guidelines and Apple legal guidelines.

There are several federal laws that protect users from information disclosure you should be familiar with:

  • Video Privacy Protection Act of 1988.
  • Health Insurance Portability and Accountability Act of 1996.
  • Children’s Online Privacy Protection Act of 1998.

Kids Personal Data

If your app use kids personal data you should carefully review all requirements of Children’s Online Privacy Protection Act (COPPA). This is the primary document that guides the decisions of app stores moderators. Additionally, you should check with IARC rules.

International Age Rating Coalition. IARC is aimed to streamline the acquisition of content ratings from authorities of different countries, such as ESRB in North America and PEGI in Europe, Australia, and Brazil. Therefore, by referring to IARC rules you will comply with requirements of most significant kids protection authorities.

Health Apps

If your app is collecting patient’s health data it may require complying with Health Insurance Portability and Accountability Act of 1996 (HIPAA). The general rule is: if your app provides users’ health data to doctors/hospitals/organizations, it must comply with HIPPA.

Here are several scenarios when your app must NOT comply with HIPPA:

  • User downloads the app and fills in with health data for personal use. You do not create, receive, maintain or transmit protected health information.
  • User downloads personal health data from hospital/doctor resource and uploads it to your app in order to manage/add to other health materials WITHOUT involvement of health provider. You do not share this information and developed the app WITHOUT involvement of health provider or any other interested party.

Video Apps

Video streaming or selling apps may fall under Video Privacy Protection Act of 1988 in case of disclosure of user rental information or share it with third-party companies.

The VPPA protection does not reach the users of a free Android app (downloaded without providing ID information). Moreover, in 2013 Netflix lobbied the change to VPPA that permits sharing rental information on social networking sites after obtaining customer permission.

Use of Open-source Software

Most open-source software is under GNU GPL license (copyleft license). If your product includes source code licensed under GPL or LGPL (Lesser GPL), then your code may become subject to the GNU terms: if you distribute your product, you then have to distribute the underlying source code.

However, there are several non-copyleft open-source licenses that allow you to release software under proprietary licenses.

App Legals

Finally, here are legal protections that should be present in your app depending on the functionality and features provided.

  • Include a Privacy Policy if your app access user’s personal data.
  • Include Terms and Conditions if your app is paid, feemium, or has in-app purchases. Also we are not recommending to use any of terms of use generators.
  • Include a Disclaimer to limit your risks in case your app not working properly or being misused.

At this point, you may think that there are too many legislative issues to consider prior app development.

But do not panic: 90% percent of those precautions and requirements are covered by our development team. So relax and entrust us with the development of your mobile application.

Originally published at

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