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Five Legal Issues that can make App Developers Restless

Today, over 80 percent of users access the Internet through their smart devices. As the web world has witnessed a paradigm shift from laptops to handheld devices, mobile app development becomes one of the most exciting and lucrative businesses across the world. It is also one of the easiest fields to enter and excel as it requires only technical knowledge regarding UI/UX design along with the expertise of implementing the technological advancements and using modern programming languages for building a bespoke app.

Though the app development sector has relatively fewer barriers than other businesses, it is not completely free from several legal issues and potential pitfalls.

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Here are the issues that needed to be handled with care for mobile app developers. Tips are given for how to setup an app business.

1. LLC formation

Okay. First things first: Formation of an LLC (Limited Liability Company) or a corporation is essential to limit a personal liability. If mobile app developers do not form a company, they may end up putting personal assets at risk while facing the legal hurdles.

At times, developers think that their firms are just the startups and they don’t require LLC formation at the initial level. But, running a business includes unlimited potential problems that can result in a painful lawsuit. When developers opt to form an LLC, they ensure financial protection as their personal assets could not be seized in any settlement.

2. NDA (Non-Disclosure Agreement)

Confidentiality is a must for building trust between the developers and their clients. In the ever-changing tech world, entrepreneurs frequently come across various confidentiality issues. An NDA or Confidential Disclosure Agreement (CDA) is the most common practice, but NDA is more often used while dealing with any third party that may get the confidential and sensitive business information. When it comes to the app development, any outsourcing procedure must be followed by an NDA.

An NDA is an agreement between developers, designers, and other related professionals for not disclosing any sensitive information about the assigned project. As a protective measure, an NDA can help the developer company through preventing the other person from leaking confidential information.

3. IP ownership and protection

Intellectual Property (IP) includes all the elements useful for development and marketing of a mobile app. App design, graphics, logo, and source code, and any written content, etc. are considered as IP, and the developers need to protect intellectual properties of an app from competitors. Any agreement with an outsourced partner should contain an ‘IP Assignment’ provision that entitles ownership of the created work to the business owner.

Developers can (and should) opt for protecting IP to survive in the cutthroat competition. They can address this objective through registering trademarks, copyrights, and patents. Here we can see what they protect for business:

Trademarks can protect app name, app logo, and the company name with logo

Copyrights can protect both written like the source code and content as well as artistic work like designs and

Patents can protect both processes and inventions.

Today, the patent issue becomes a burning issue, and even the tech giants like Apple and Samsung could not resist (and prevent) themselves from patent infringement, developers must take special care for protecting intellectual properties.

4. Data protection and privacy

‘Terms of Use’ and ‘Privacy Policy’ are two legal jargon’s that become more and more significant in today’s rapidly changing business scenario. ‘Terms of Use’ is a legal agreement between the app developer and the app user. It is nothing but the guideline that shows how an app should be used along with the consequences of an app’s improper use.

If an app is very basic and does not contain any interactivity then the ‘Terms of Use’ is not necessary. But if the users of an app interact with each other or with members of the app development company in some way, then the developer should think about adding the ‘Terms’ agreement.

Privacy Policy is of utmost importance especially for apps that have children under the age of 13 years as users. Very strict privacy requirements are enforced under the Children’s Online Privacy Protection Act (COPPA).  If an app collects personal data like names, emails, phone numbers, addresses, etc. in any way, then its developer has to give the privacy policy that discloses which data is collected and where the data will be used.

Some app companies have faced financial penalties for not comprising COPPA requirements. It is better for the developer to avoid collecting any PII (Personally Identifiable Information) by any means as it is fairly possible when children use any app or game.

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5. Distribution and advertising

After developing an app, the developer has to select the app store and mobile platform provider for distributing the app. The developer has to follow specific compliance policies of platform providers or app stores as well. Such policies include additional usage policies and an end user agreement with the app users. Both Apple and Google’s agreements have these policies.

When it comes to app promotion, the app developers need to comply with the provisions of the TCPA (Telephone Consumer Protection Act) and CAN-SPAM rules along with other local acts. The developers should also keep these acts in mind while serving any third-party advertising through the app or conduct any contest for promotional purpose through the app.

A mobile app development solution provider needs to be well aware of all these key legal considerations while setting up a business. Also, all these major issues have a plethora of details that are necessary to be understood and considered for ensuring success in the thriving mobile app development domain.

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Nitesh has over 6 years experience in the software development industry. Initially a web developer coding in HTML/PHP/Perl etc., he later got into mobile app development and now has expertise in project management, working at IndiaNIC.

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