By Cliff Ennico
"I'm a graduate engineering student at a major university in the Midwest. Some of my fellow students and I have thought it would be a great idea to make a little extra money by developing software applications (commonly known as "apps") for mobile devices such as Apple's iPhone® and mobile devices running Google's Android® software.
Some of these apps are our original ideas, while we would also offer our services to help other app developers get their products to market. What are some of the legal issues we should be thinking about?"
First of all, check with your faculty advisor and make sure you can engage in entrepreneurial activity as a full-time graduate student. Some universities have policies on that. If you have received any sort of grant or scholarship to engage in your studies, the agency that granted you the scholarship may have imposed additional conditions. Also, if any of you are here in the United States on a student visa, there may be immigration issues to deal with.
Assuming no problems there, here are some things to think about:
Mobile Apps You Develop Yourself.
Mobile software applications have three distinct parts:
The software that runs the application;
The "toolkit" that enables the application to function on the mobile platform (such as Apple's iOS software for the iPhone and Google's Android); and
The icon that users click on to launch the application.
Because you are developing these apps yourself, you should own all rights to the software that runs the app. By "you" I mean you and your buddies, who are developing these apps as a legal partnership. You may be forming different partnerships for each app (for example, A and B may develop the first app, B and C the second, A and C the third, and so forth), so get a written agreement with your fellow students right now as to how you will split revenues and profits from each app.
In order to become a "registered developer" for a mobile device platform owner such as Apple or Google, you will need to license the owner's software "toolkit" that will enable your app to run on that platform. Be sure to read each platform owner's license agreement for their toolkits very carefully (don't just click on the "Accept" button the way most amateur developers do). While the platform owner will want to maintain all rights to their "toolkit", some development agreements also give them ownership rights to your app software as well, which isn't right. They should get only the "nonexclusive right and license" to use your app on their platform, and you should have the right to terminate the relationship at any time and for any reason.
When reviewing a "registered developer" agreement, also keep your eyes open for provisions that:
prohibit you from developing apps whose "look and feel" are too similar to other apps already in use on the platform;
prohibit you from licensing your app to a competing platform;
enable the platform owner to boot your app off of the platform if another developer comes up with a more successful app for the same or a similar function; or
enables the platform owner or other app developers to modify or reverse engineer your app without your consent.
As for the icon users will click on to launch your app, you should speak to an intellectual property lawyer about trademarking or copyrighting each icon you create so other developers can't copy its "look and feel" if your app is successful. Try not to copy other app icons, as there's a good chance the other app developer will sue you for infringement if people are confusing your app with theirs.
Apps You Develop for Other People. Whenever you are developing apps for other people, you are a "software developer," and should have a written software development agreement with each of your customers. A business lawyer can create one for a fee in the $500 to $1,000 range.
Your customers will want to own all intellectual property rights to the app software you develop for them. That's okay as long as they don't get the rights until they have fully paid you your development fee.
They should not, however, have any rights to any software programs or tools you use internally to develop apps for all of your clients – these are proprietary to you, and the contract should clearly say that.
Also, some customers will want you to agree that you won't develop a similar app for their competitors. While it's okay to say that you won't develop an identical app for someone else, it's not okay to say you won't develop an app having the "same or similar functionality" for another customer. As most mobile apps have a relatively short shelf-life, keep any noncompete period as short as possible (no more than six months unless the customer is willing to pay for a longer period).
Cliff Ennico
(
crennico@gmail.com
) is a syndicated columnist, author and former host of the PBS television series "Money Hunt." This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at
www.creators.com
. COPYRIGHT 2010 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS.COM
