When a business has a great idea for an iPhone application, it is understandable that the development of the application itself takes priority.  However, it is important to bear in mind that an application gives rise to legal obligations, not only between the business and the retailer (e.g. Apple) but also between the business and the end user.  This is where the business must consider the end user licence agreement that will be required, not only as it is required as part of the development and approval process with the retailer, but more importantly because of the legal obligations that might arise.

Whilst the development of applications can be through a number of retailers, this article will refer to the process involving the development and approval of an iPhone application through Apple.  In this regard, a business will need to consider its legal relationship with Apple, as well as the risks arising with an end user.

Consider Issues with the iPhone Application                                                                                                                

When dealing with the potential risks of an iPhone application, it is important to firstly consider the potential issues that might arise with someone using the application.  Some applications (e.g. Angry Birds) might be fairly innocuous and low risk, whereas others (e.g. location services) might have serious consequences.

By way of example, consider the development of an iPhone application that relies upon third party location services in order to track business assets and capture important reference data for field work.  An obvious risk would be the possibility of inaccurate information being provided by the application.  It might cause the end user a loss of time or money if their location was displayed incorrectly or if assets being tracked were recorded incorrectly.

Another issue is whether the application is infringing on a third party’s copyright.  In the above example, third party sources of information (e.g. Google Maps and Open Street Maps) were used.  Therefore, it was necessary to obtain the terms of use of those third party applications to determine what could and could not be done in terms of incorporating those third party services into the application.  Also, depending on what was being used and the extent to which it was being used, you might require a provision in your own end user licence agreement to deal with the use of such third party applications.

Standard End User Licence Agreements

Fortunately, Apple Inc. has a standard End User License Agreement (EULA) that you can adopt as part of the iPhone development approval process.  As license agreements go, the current version is generally very good and covers most of the issues.   It is fairly comprehensive in terms of excluding or limiting liabilities and any warranties (promises) about the application.  However, because it is a generally worded document, it does not cater for specific iPhone applications that have their own requirements.  Consequently, you need to ensure that your end user licence agreement covers the important issues.

In reference to the above example, one issue with the standard EULA was that it did not cater for the requirements of third parties (e.g. Google Maps).  Given the manner in which the application was incorporating the location services of third parties, the business needed to explicitly state in their terms of use that users were agreeing, by using the application, to be bound by Google’s terms of use.  In this regard, the business also had to be mindful of using a third party’s information which was subject to copyright.  In the very least, you may need to ensure that copyright and trademark notices remain on the information presented in the iPhone application.  You may also need to incorporate pop-up windows in the application (with a link attached) to ensure that users agree to be bound by the third party’s terms of use.

Another issue that might arise is the need for a privacy policy.  If the application enables any party to gain access to information about users of the application (including personally identifying information or non-personally identifying usage information) you may need to have a privacy policy incorporated into the application or linked to the application.

Given that some iPhone applications use third party software, you should determine whether you need to keep up-to-date with the third party’s terms of use, which may change over time.  For example, an application that uses third party maps (e.g. Google) may have a limit to the number of daily downloads.  That may change over time forcing the application to subscribe to a premium service allowing greater downloads or curtailing the use of the third party software.  If you do not keep up-to-date with the terms of your use of the third party application, you could find yourself in breach of copyright or in breach of a third party’s terms of use.

Conclusion

Businesses and developers must be aware of the potential legal risk posed by the development and distribution of an iPhone application.  Consideration should be given not only to the legal relationship between the business and the retailer, but also to the risks between the business and the end user.  Also, developers should be mindful of using third party software and the implications.  Issues such as copyright and breaches of intellectual property need to be addressed.

Properly drafted terms and conditions tailored to the particular circumstances of each iPhone application will help manage the risks posed by such applications.

Joe Kafrouni, Legal Practitioner Director, Kafrouni Lawyers

Disclaimer

The information provided by Kafrouni Lawyers is intended to provide general information and is not legal advice or a substitute for it. Software developers should always consult their own legal advisors to discuss their particular circumstances. Kafrouni Lawyers makes no warranties or representations regarding the information and exclude any liability which may arise as a result of the use of this information. This information is the copyright of Kafrouni Lawyers.

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