App Developers Alert: Know Thy Ownership Rights
Getting ready to put your mobile app out to the masses? Amid all the excitement and frenzy, the tendency to overlook certain ownership rights can prove to be a major headache later down the post-release lane. During the early development phases is when you need to take certain precautions to make sure you remain the rightful owner of your app. This goes without saying, whether you’re overseeing development of your app, or developing it on your own.
It’s your app; you have rights – what could possibly go wrong you ask? Let’s consider these likely scenarios:
- Somebody comes up to you and says they have a share or ownership right in your app or the company you work for. This person claims they were “somehow” involved in the development process, or the old “phantom founder” routine, claiming they played a part in forming your business and should be given a share of the “booty”.
- A person contacts you or makes it publicly known they own some or the entire app, and forges certain facts to make it look like they have a major share or contributory role in the development process.
- A current or former employer of yours or even your coworker’s may claim that an app was developed while either one of you were employed, and are therefore entitled to ownership.
- It could even be someone as bold as to claim you used their code in your app without permission, and that you’re getting sued for intellectual property rights infringement.
These are just some likely situations that may arise as a result of not being aware of your mobile app development rights. These individuals tend to suddenly pop up on your radar, kind of like a long-lost relative who shows up at your door, the moment they find out you’ve hit the jackpot at your local lottery.
When you’re able to bag an investor for your app, they’re going to ask for assurances in the form of warranties and representations; essentially this is needed to make sure you are the sole and rightful owner. And if any “undesirable” scenarios such as the ones above arise, their losses are covered.
This one should send fire alarm bells ringing in your head: if the proper precautions are not taken, you could be taking huge risks to provide these warranties, indemnities and representations, particularly in situations where an individual or company “magically” pops up to claim ownership rights to your app.
Failing to take the required precautions can land you in hot water without warning: having to go back to others who had a say in developing the app, just to obtain the rights to provide warranties, indemnities and representations to save your neck can get pretty awkward.
Your bargaining power has practically gone out the window.
You might be in wide-eyed wonderment by now, thinking what some of those precautions may be. Let’s get your bases covered, shall we?
Know Thy Founder
In most cases, several individuals are involved in the business or some phase of the development process. For instance, the idea is yours, but you may have co-workers or college mates working on it as well. Perhaps you sought the assistance of others with regard to certain developmental aspects due to not having enough technical expertise.
If it is generally understood that any or all individuals tied in to the development process will be considered a part of the business that’s developing and monetizing the app – this is where you need to have a formal and signed agreement, which describes the exact ownership rights, decision making privileges and revenue sharing, among other things.
Also Know Thy Employee!
It is generally understood that the person who’s actually working on the app has mobile app development rights – he/she is the legal owner and copyright protected. There is however, an exception to the rule when work is done within the ‘scope of employment’.
This work is often categorized as “work done for hire”. Copyright laws in the US and other jurisdictions dictate that “work done for hire” is the legal property of the employer, not the employee.
It must be kept in mind that this doctrine applies solely to copyrights. Under employment, employees may develop materials or ideas that are in fact, protected my certain intellectual property rights. Before these employees start working for you, get in the habit of asking them to sign an agreement that gives you ownership of intellectual property created by them.
Get to Know Those Independent Contractors
Sometimes we simply don’t have the luxury of expertise and in-house resources to develop apps according to our desired timeline, in which case the best route to take is hiring a development services business or independent contractor.
Know that a written agreement is crucial since it gives you ownership rights, the absence of which will give the developer ownership rights over the portions he/she specifically developed. If this ownership copyright isn’t explicitly assigned to you in writing, the developer has what’s called an “implied license” to use the app, which can be revoked at any time.
This could make things difficult for you – the developer may demand further compensation in order for you to use the app.
Another essential aspect to consider is how this written assignment is going to be phrased. Courts have their way of interpreting these statements. For example: “Developer assigns product ownership to client”. Courts may view this as simply a promise to offer ownership privileges somewhere down the line, as opposed to an actual agreement that’s currently in effect.
These formal assignments need to be phrased in a deliberate and “wordy” manner: “I hereby assign ownership of the ‘work product’ to so-and-so client”. That is what you’d call a deliberate assignment; there’s zero room for doubt or other possibilities.
The developer may be a sole freelancer or a company. In case of the latter, you must take it upon yourself to ensure that all company personnel involved in the app development process are required by that company to sign written ownership assignments similar to what we’re discussing. Whether these assignments are directly tied to you or it’s the company who in turn are assigning it to you, clear and transparent ownership rights must be visible throughout the development chain.
A Word on Employees, Freelancers and “Moonlighting Founders”
Apps have a knack for being developed on weekends or evenings by folks in their “garages”, who also happen to have full-time jobs. If you are indeed planning to assign work to anyone currently employed by a company, even if they’re your founders, employees or freelancers, review the agreement they undertook with their employer on mobile app development rights. This must be done before work gets started so as to avoid any unpleasant situations where these employees take claim for services rendered.
Generally, employee agreements include a provision, which gives the employer rights over intellectual property belonging to the employee. These ‘assignment of rights provisions’ are written in a rather broad sense, in order to take into account products created either by the employee under employment, or outside work hours off of their own resources.
These employee “assignments of rights” provisions are increasingly being narrowly drafted as of late; if the product created exclusively for you happens to be similar to the developer’s employer or their ‘anticipated/actual research’, they (the employer) may make claims of being the rightful owners of that product/app. Keep an eye out and pay special attention to how the employer’s business may be related to yours or competitive in nature.
That About Sums Up Your App Ownership Rights
You practically broke your back in half working those long hours to get your app off the assembly line. Now you have a better gist of how to prevent your app from being misused as far as ownership rights go. People even companies are out there to steal your limelight, and make wild claims to make revenues off you.
Bear in mind though, this article is not meant to act as a legal guide. It is merely a compass to get you pointing in the right direction. Other real-world scenarios can bring along multiple nuances, which is why you should always consult legal counsel from someone who’s familiar with game and app development issues being particularly faced by startups.
Leave your comments below; tell us what you think. Perhaps we overlooked other crucial pointers that may prove highly useful and worth a mention.
About the Author:
Umar oversees digital strategy at Social Cubix, a leading iPhone app development company and is a Digital marketing pro. He is a columnist for famous marketing publications and love working with people all over the world. Get in touch with him on Twitter.