Mobile apps are a profitable and relatively accessible business venture. Statistica has reported that in Australia, revenue from app sales is expected to reach more than $5.5 million USD in 2022 alone. It’s clearly a huge market and if you have an idea for it, there are potential benefits from pursuing it.
Before you begin developing code though, there are a few legal considerations to understand so your app is well-protected. Keep reading to learn more!
Developing An App? Here’s What You Should Know
Even though developing an app is a pretty accessible market compared to some other business ventures, there are some legal aspects that many app developers skim over. It helps to get these matters sorted in the early stages so you can move onto thinking about the creative process and bringing your idea to life.
Let’s go through some key considerations.
Mobile App Development Legal Issues
The first thing to consider is getting the right legal agreements in place. You may be wondering why you need a legal agreement if you’re simply developing an app, but these agreements are actually vital when it comes to protecting your business ideas and IP.
Protecting your IP and inside information is essential because if it ends up in the wrong hands, it could mean the end of your app.
Here are the main ways you can avoid this outcome.
Internationally Enforceable Contracts
Many apps are available in multiple different regions. If you want yours to be accessible outside of Australia, then you need to consider getting internationally enforceable contracts.
Essentially, these contracts have a clause that takes into account the global nature of your business and includes provisions that ensure the contract is still legally valid in jurisdictions outside of Australia.
These clauses are known as international arbitration clauses. If this clause doesn’t exist in your contracts, you’d need to turn to governing law and jurisdiction.
Mobile App Privacy Obligations
Private information includes things like:
- Phone number
- Bank details
Mobile App Confidentiality
Maintaining confidentiality is another aspect of protecting your app. You don’t want private information regarding your venture to be leaked and potentially used against you, so it’s important to take precautionary steps to prevent this.
For example, a Non-Compete Agreement prevents ex-employees or ex-contractors from working with competitors for a specified period of time, or prevents their future employment in a certain geographical area. It’s a good way to minimise competition and keep your information confidential, but it must also be reasonable under the law to be effective.
Mobile App Liability
Liability refers to the legal responsibility your business has towards all its users. Developing an app is a generally low risk business compared to other ventures (think of things like skydiving!).
However, being an online app means it carries cyber security risks. Think about data breaches and scams!
So, as an app developer, you need to take measures to limit your liability for these kinds of risks. Liability can be addressed in exclusion clauses or certain other types of liability waivers. These clauses would limit or exclude your liability, depending on how it’s drafted.
It’s always best to talk to a legal professional to get the most accurate advice.
Protecting Your Mobile App’s IP
Your intellectual property (IP) is likely to be a significant part of your business. Intellectual property refers to your intangible assets, such as logos, slogans or even scents. If your mobile app has forms of IP, your best bet is to take steps to protect this from competitors or any unauthorised third parties.
IP can be protected through trade marks or patents, both of which need to be registered with IP Australia. If you have IP that cannot be registered but you’d still like to protect, you can include confidentiality clauses in your contracts or NDAs.
Mobile App Terms And Conditions
Having Mobile App Terms and Conditions is essential for regulating activity and how users engage with your app.
Terms and conditions will set out the terms that users need to agree to before they can actually use your app. This might include making an account or disclosing their age before joining.
It can also be used to limit liability for anything that goes wrong while they use your app.
Therefore, if there is ever a user that violates these terms, you can enforce the document and take legal action if necessary.
Contracts With Key Parties
App development may involve engaging with external parties. This could involve hiring employees, contractors or suppliers.
It’s great and often beneficial to source help, but business relationships should always be established with a contract. This way, everyone is on the same page and should a disagreement ever arise, you always have a legally binding document to refer back to.
Mobile App Disclaimers
When you offer a product or service online, there’s a lot that is out of your control once someone purchases it. This is where a disclaimer can come in handy.
Disclaimers can be used in many different cases and scenarios. They can even act as a shield when someone tries to make a claim. For example, if the content on your app could be sensitive for some people, having a disclaimer in place can lessen your liability if there is a related incident (you can look into exclusion of liability clauses).
App Store Agreements
Different platforms that sell apps have their own agreements that you need to oblige with before using their medium. It’s important to make sure your app correlates with all the regulations on their agreements before you sign up to use it (such as the Apple Store or Google Play).
There can be a lot of information to comprehend in these kinds of documents, so don’t hesitate to reach out to a legal professional for help!
End-User Licence Agreement (EULA)
An End-User Licence Agreement (EULA) is an agreement with the user and the entity licensing the software (in this case, it could be you).
Much like the terms and conditions, a EULA agreement sets out the requirements users need to comply with when they are using the app. A EULA can prevent others from copying your app’s mechanics or stealing any copyrighted materials, as well as any claims against you that may arise.
Do I Need An App Development Agreement?
If your business will be hiring a developer to create the app for you, then yes, a Software Development Agreement is highly recommended. The agreement will cover important matters such as scope of work, deadlines, milestones and specifications. It can also be tailored to suit your business’ needs and, like we mentioned above, having a contract in place is a necessary step to protect your business!
Our team of expert contract lawyers can help you out here.
What Apps Are Illegal To Build In Australia?
Creating apps is a great business venture, however, it’s important to be careful. Not all app ideas are going to be legal. Your app needs to be in line with other Australian rules and regulations.
Let’s take a look at some of the kinds of apps that can be considered legal and illegal.
Are Call Recording Apps Legal?
Call recording apps permit users to record conversations on their phones. In Australia, it’s illegal to record a conversation without the consent of another party according to the Telecommunications (Interceptions and Access Act) 1979.
Therefore, if you’re thinking of creating an app that allows users to record calls, it’s important to take the relevant laws into consideration.
In addition to legislation, some sites that sell apps may not permit such apps on their platform – be sure to check out any relevant terms and conditions before proceeding.
Are Gambling Apps Legal?
It’s lawful for Australian users to play on forms of online gambling, including mobile apps. However, the laws differ for developers of these apps.
According to the Interactive Gambling Act 2001, it’s illegal to advertise gambling apps. Furthermore, there has been talk of app stores banning gambling apps in the future, so developing a gambling app may not be worth the risk.
Are Police Scanner Mobile Apps Legal?
Police scanner apps allow people to listen to the radio of police officers and even other emergency services (that have been permitted public access). Police scanner apps have been criticised for being potentially dangerous, however, they are not illegal.
Despite this, there are regulations regarding how the information is used and the way users conduct themselves. If you are thinking of developing a police scanner app, it’s important to thoroughly research all the relevant information first.
Is Reskinning Apps Legal?
Reskinning apps is simply the process of changing the front picture of an app to something else – this is perfectly legal and, in fact, there are many apps that can be used to achieve this.
However, it is important to ensure that all the pictures being used for reskinning have permission and aren’t infringing on any copyright regulations.
Creating an app can be a fruitful business venture, however, it’s important to have all your legal documents sorted to give your business the best chance possible at success. To summarise what we’ve discussed:
- Protecting your IP and confidentiality is key
- It’s also important to have the right contracts in place with relevant parties, including internationally enforceable contracts
- Uphold your privacy obligations in Australia and other regions
- Take into consideration liabilities and disclaimers
- Have a terms and conditions as well as a EULA ready
- Be aware of any agreements you make with an app store
- If you’re utilising the services of an app developer, get an App Development Agreement
- Ensure the app you are building is compliant with other Australian regulations
If you would like a consultation on the legal considerations of developing a mobile app, you can reach us at 1800 730 617 or firstname.lastname@example.org for a free, no-obligations chat.
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