Think BR: Whose app is it anyway? The IP issues in apps
If you're launching an app you should be prepared for possible IP infringement, write Arty Rajendra, partner, and Rosie Burbidge, associate at Rouse Legal.
About 18bn apps were downloaded in 2011. There are apps for everything conceivable, including how to manage your intellectual property (IP) registrations.
Yet one of the primary legal issues currently vexing app developers, publishers and commissioners is ensuring the protection of and compliance with IP rights.
Every app contains a variety of IP rights. Their exact nature depends on the type of app, but all apps will, at least, contain copyright in the underlying software, text and images used within the app.
Some apps may also use technology which has patent protection for particular functions.
Finally, registered trade marks may be used in the name, advertising or any text in the app.
How can developers, publishers and commissioners avoid infringement claims and protect, as far as possible, the creativity and inventiveness put into apps?
Copyright protects creative works, such as text, software, images/graphics, music and film. More complex apps may also include live streaming and allow user-generated content (UGC).
These engage a large number of copyrights that may be owned by many different entities.
It is essential that you clear any third-party copyright content included in your app which you do not have the express right to use.
You should contact the copyright owner or any dedicated collecting societies or image libraries to which he has delegated his rights.
The same standards of rights clearance should be applied to apps as for any commercial endeavour - even if the app is given away for free.
The situation is less straightforward where:
- No owner is immediately identifiable (orphan works) or
- Clearance is refused or prohibitively expensive
If you have tried to clear a work and the rights owner has refused/it is too expensive, do not use the work or you risk being sued.
In relation to orphan works, the UK has been through an extensive review process and it is likely that some sort of clearing house will appear in the not-so-distant future.
In the meantime, take all reasonable steps to identify the owner (and keep records) and if the author cannot be found, either use another work or set aside an emergency fund to settle any future disputes over use of the work.
The extent of use - both prominence and frequency - should determine the amount of money which is set aside.
UGC content can be dealt with in your app terms and conditions. These should be brought to the attention of users at the time of both app download and content upload.
While it may be tempting to include a clause assigning all rights in UGC to you in return for use of the app, a limited licence for you to use the UGC content on the app is less likely to alienate users.
How to avoid others copying your apps
There is an old adage of copyright law that 'there is no copyright in an idea'. There is, however, copyright protection in the expression of an idea.
Thus, an app which simulates drinking a pint of beer does not prevent another developer from independently creating an app which simulates drinking a glass of wine.
However, if an exact copy or a 'substantial part' of the original app is taken, eg, in terms of the code used and/or the visual image on the screen, the creator of the original app may have a copyright infringement claim.
To succeed in a copyright infringement claim, or ensure speedy settlement for wrongful use of your app, you need to prove that:
- Your work is original (ie, not copied).
- Either you created it or you have an exclusive licence to use it.
- A substantial part of your work was copied in the later app.
Issue (3) depends on the relevant facts, however, you can control issues (1) and (2) by maintaining clear and accurate records of the dates of document creation and ownership. You will own copyright in works created by your employees.
Where the app creation process is outsourced to a non-employee, you will need an assignment to you of the copyright in the app, or be an exclusive licensee to be able to enforce copyright in the app.
The contracts between you, the app developer and providers of content (such as artwork) will be determinative and merit legal advice before signature.
Software, including open source
Software is available in two forms: source code (readable by humans) and object code (readable by computers only).
You need to be clear about your rights in your app source code and how you can enforce it.
External developers are likely to retain control of the underlying software development tools but you may well need the right to make improvements and some form of access to the source code to avoid being tied in to the same developer for the lifetime of the app.
Source code is protected in Europe as literary copyright; however, the extent of this protection in the UK is fairly limited.
While it is possible to prevent copying of the source code, it is currently permissible to recreate the software’s 'functionality' (ie, to reach the same programming result by a different means), although the European court has been asked to consider whether this is right.
Open source software (OSS) is made publicly available in source code form. OSS is provided under an OSS licence, which generally allows users to study and use the source code.
Users can also modify the code but virtually always only on condition that all improvements are made publicly available.
Thus you cannot prevent others using the additions and improvements you make to any OSS used in your app.
If you mix third-party owned software with OSS you should be careful not to breach either set of software licences.
It is important that you are always aware of the consequences of the licences on which you have built your app.
Patents - watch out for patent trolls
Sadly 'patent trolls' is not a new gaming app but a source of potential - and almost certainly financial - pain to those putting their apps on the US market.
Patents are generally used by businesses to protect their novel innovations generated through R&D.
However, there has been a recent trend in the US for certain companies to buy unused patents purely for the purpose of forcing app owners to pay large sums of money for a licence in order to avoid being sued for patent infringement.
As a result, many app providers have withdrawn from the US market. The problem is primarily, but not exclusively, a US issue.
Regardless, this inhibition in a major market affects global app development.
In Europe, it is difficult to get a patent which covers the underlying software in an app or a method for doing business.
This is because patentability requires a new and non-obvious technical aspect to the claimed invention.
The position in the US is different and it is easier to get a patent for both software and business methods, although not as easy as it once was in light of recent US case law.
The patents which are causing such a problem in the US cover, among other things, Twitter-style feeds and other key features of social networking apps.
For example, there is a pending patent application for 'A method and system for communication, advertising, searching, sharing and dynamically providing a journal feed'.
While what is actually protected may not be as broad as the patent title suggests, there is justifiable cause for alarm.
Removing your app from the US is clearly the easiest means of avoiding such patent litigation but that means losing out on a huge market.
Further, removal of the app has a goodwill impact on users, particularly those who have paid for it.
If you are concerned that your app may fall within the claims of one of these patents, it is worth taking advice from a patent attorney/lawyer on the risks involved and consider whether it is cost effective to carry out a patent search to see if your app potentially infringes a third party patent.
Alternatively, it may be cheaper to simply have some dedicated funds set aside to deal with the issue if it arises.
Before giving up on the US market, also consider the new mechanisms to challenge patents recently introduced by US legislation.
This legislation includes special transitional provisions for 'business method inventions' and enables a request for a second review of the patent’s validity (by the US Patent Office) if you are sued for, or are accused of, infringing the patent.
Apple and Google (among others) have recently stepped in to provide legal assistance against app patent trolls but it will take years for the issues to be resolved.
How to beat the trolls
Patents are technical in nature and must be 'novel' and involve an 'inventive step' in light of the 'prior art', ie, any form of prior disclosure to the public.
In order to invalidate some of the patents that are being deployed against app developers, there are a number of crowd-sourcing initiatives to identify such prior art which would assist in invalidating the patents.
If you are at risk of infringing a patent, it would be worth checking out some of these initiatives and even joining in the search.
It may be possible to apply for a patent to protect technology used in your app, particularly in the US.
In order to obtain patent protection, confidentially should be maintained until advice as to the patentability of the technology has been obtained from a patent attorney/lawyer.
Once you proceed with the patent, you should monitor the market to check that third parties are not infringing.
Trade marks protect brand names and other signs which identify commercial origin.
It is easy to infringe registered trade marks inadvertently. You should be careful not to infringe third-party trade marks in the name of your app and in any text, description or logos which are used on the app trading platform or within the app.
One major app publisher was caught out for using the name of a celebrity, which had been registered as a trade mark, in its app.
The celebrity complained and the app had to be withdrawn, irritating users and destroying carefully built up customer goodwill.
It is possible to conduct trade mark clearance searches in key jurisdictions cost-effectively.
Further, if you have come up with a distinctive name for your app which you want to prevent others using, you should consider registering it as a trade mark in key territories.
All IP rights - how to stop the infringers
A poor-quality infringing app which becomes associated with you through use of your registered trade mark or copyright works can have a significant negative effect on your brand and action should be taken as soon as possible when such an app is released.
You need to be fairly pro-active to enforce your rights as the platforms do not proactively monitor their stores to ensure that the apps sold on them do not infringe IP rights.
The App Store, Android Marketplace and other app platforms provide relatively user-friendly methods for requesting takedown of apps which infringe your IP rights.
You simply complete an online form stating the nature of your complaint. There is a quick response time to such takedown requests.
Where possible, any IP problems should be resolved via the relevant online marketplace. If this is not possible, a legal letter may resolve the problem.
Maximise your rights
The virtual app world is gradually entering the more traditional physical merchandising domain.
For example, Angry Birds sells memorabilia from t-shirts to toys and even an egg recipe book.
While the advantages of cross selling are obvious to marketers, it is important to be sure that all the relevant rights are owned by the company which intends to exploit them.
Different types of rights may exist and having a clear contractual chain of ownership will avoid any confusion further down the line.
With so much variety across millions and millions of apps, it is hard to provide the detail to cover every legal issue which may arise, but the basic message is get your contracts in place up front and make sure (so far as possible) you own the rights in your apps.
If you’re not sure, do your best to clear them and, for the worst case scenario, set aside a fund to pay for any claims which may arise in the future.
Arty Rajendra is a partner and Rosie Burbidge is an associate at Rouse Legal
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