October 20, 2018

Legal Corner: Mobile App Development

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The Middle East has some of the highest percentages of smartphone penetration in the world and is reported to now account for over 10% of global mobile app (“App”) traffic and revenue generation.   Most of us here in the UAE transact via Apps on a daily basis whether it is booking a Careem, topping up Salik or buying stuff on the likes of Souq.  It is not surprising therefore that most companies in the UAE are at least considering Apps as a way to innovate and enhance their current business offerings.  Here is a checklist of legal issues to consider when developing your own App.  

1. Protecting the idea: With the ease and speed of making Apps these days, you should be very careful about who you share your idea with.   We would recommend signing a non-disclosure agreement before disclosing the details to any potential App developers.   Certain legal protection (such as copyright) only protects the expression of your idea (e.g. the detailed written specification or the code of the App) rather than the idea itself (e.g. a peer-to-peer accommodation booking App).     

 

2. Specifying exactly what you want the App to do:  It sounds simple but getting the specification right is one of the key requirements. Vague specifications can lead to arguments over acceptance and requests for out of scope work from the developer.  Other considerations in the Middle East region include whether the App should be available in Arabic and also ensuring that the App developer complies with the relevant media content laws.

 

3.  When do you need it by?   It is advisable to set out in the agreement the development milestones, timelines and liquidated damages for delay, especially where being first to market is critical.

 

4.  Which development platform?   Are you aiming at the iOS (iPhone) or Android (Google), Windows Mobile market etc.?  You should specify whether you want one, or more commonly more than one, format. 

 

5.  Acceptance Tests:  Like traditional software development, the App development agreement should set out the process for acceptance testing and the ramifications of failing.   These tests can be agreed between the parties and/or linked to the App passing third-party tests such as the App Store or Google Play. 

 

6.  Payment Terms: We would normally recommend that the payment terms are linked to successful completion of milestones in the development and a percentage retained until passing the acceptance tests and/or expiry of the warranty period. 

 

7.  Ownership of Intellectual Property Rights (IPR):  As a customer, you will want to own the IPR in the developed App whereas the supplier may argue it should be owned by them with some form of a licence granted back.   Under UAE law there are some peculiarities about the assignment of future IPR so the assignment clause needs to be carefully worded.   In addition to the copyright in the code of the App, you should also consider registering the name of the App (and/or your company name) as a trademark prior to launch.  See our earlier Checklist on Registering Your Brand in the Middle East.   As a bare minimum, a clearance search should be undertaken to make sure the proposed name isn’t already in use.  Also, if the App is particularly innovative it may even qualify for patent protection. 

 

8.  Warranties:  As a customer, you will want certain warranties in relation to the quality of the development services and that the App will perform in accordance with the specification etc.    

 

9.  Support Services:  Again, common with other software development, on-going support and maintenance will be important.  Consider support hours and service level agreements (and service credits) for response and fix times. 

 

10.  Assignment:  If you haven’t yet set up your legal entity (which we would recommend is done prior to signing any agreements so your liability is limited), make sure you have the right to assign the agreement over to the new entity once established.  

 

11.  End User Terms:  Before launching the App, you will also need a decent set of end-user terms and conditions (tailored for the services or products the App offers) to be built into the App (normally with a button to ‘accept’).  This would normally also include a privacy policy. You will also need to make sure that the electronic approval process complies with the applicable e-commerce law requirements to ensure it will be legally binding. 

 

12.  On-going Compliance:  Once the App is up and running, there is a wide range of applicable laws you will need to comply with such as data protection, advertising, anti-SPAM laws, competition law etc.  See our earlier Legal Update on Digital Media in the UAE for some further details.  

           

If you would like any advice on your mobile App development, please contact the team at The Bench on info@thebenchlaw.com.  Our tech lawyers are recognised specialists in this field (Band 1 ranked TMT Lawyer in the UAE by all the leading legal directories such as Chambers & Partner and Legal 500) and have extensive experience of helping companies design, develop and roll-out Apps in the Middle East and globally.

Topics: Legal Corner, Regulatory Compliance, Intellectual Property, App Development

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