With the ubiquitous presence of iPhone and Android devices, as well as the increasing adoption of tablet computers, there’s a huge marketplace for new mobile software applications—better known as “apps.” Apple® alone advertises over 500,000 downloadable iPhone apps in their online store.
The app craze has opened new opportunities for small entrepreneurs and software development businesses hoping to create the next Angry Birds®. Larger companies, also competing to be part of the in-crowd, are hiring software developers to build a branded app that will (hopefully) engage and convert more customers.
Distracted by the excitement of selling their new supercool product, few businesses or developers actually complete any legal due diligence before launching into the marketplace. By doing so, they risk exposing themselves to various legal issues and, subsequently, lots of unplanned costs. If you’re planning—or are in the process of developing—the next Instagram®, below are some things you can do to help smooth the road ahead.
Define Who Owns What
Before starting work on your great new app, video game or software program, figure out who’s going to own it. Is it you? Your company? A developer you’ve hired or some random guy—or all of the above? Whatever you decide, make sure you have a good written contract to define who owns what, such as with a software distribution agreement. Having an agreement like this in place will outline the rights and responsibilities of each party and can help prevent future disputes.
Choose a Good Name
You probably thought long and hard to come up with a clever name or logo for your app. Before you start using it, make sure someone else isn’t already using a similar one that could confuse your customers—and your competitor’s. If confusing marks are out there and ignored, all that money spent branding your product and promo materials can be wasted—or even worse, spent on an expensive lawsuit against you.
Check to see if other people are using a similar name or logo with a trademark search; and if your awesome trademark is truly original, file a federal application for trademark registration with the U.S. Patent and Trademark Office (USPTO). This is the best way to protect your mark from being infringed upon.
Protect Your Ideas
To be competitive in a saturated app market, your product, ideally, is innovative and better than what’s already out there. Take the necessary steps to make sure others can’t steal or use your great idea.
Smaller companies often rely on protecting their product as a trade secret, which may be useful so long as no one else lets the cat out of the bag or independently figures it out. If you go down this path, make sure you set a company-wide strategy and policy to prevent discovery or theft using non-disclosure agreements.
Software patents can protect systems, methods and functions within your app, such as user-interface features, editing functions, compiling techniques, or program language translation methods. Patent owners have exclusive rights to making, using and selling the invention, and anyone infringing on those rights can be subject to stiff penalties.
Since you can’t get a patent until at least 12 months after exposing the invention to the market, decide if a patent is worth the time and cost (the process can be long and costly). If you do decide to file for a patent, don’t delay too long because the U.S. is moving into a “first-to-file” patent system, making it important to be the first in line with your invention. If you’re not sure your invention is eligible for a patent—or will even make enough money to justify the cost—you can file a provisional application for patent with the USPTO. The filing fee for a provisional application is a fraction of the fee for a nonprovisional application, and it also gives you a full year to work out the details for your patent application, during which you can officially label your invention as “patent pending.”
Protect the Source Code
An alternative to a patent is registering a copyright. According to the U.S. Copyright Office, “your work is under copyright protection the moment it is created and fixed in a tangible form that it is perceptible either directly or with the aid of a machine or devices.” However, with a registered copyright, you can take infringers to court and be entitled to money damages and attorney fees if you win in a lawsuit. While you can register a copyright as well as file for a patent, you don’t have to do both. Sometimes, the choice of opting for both or just registering for a copyright comes down to time and price. A copyright registration is significantly cheaper than a patent, and often takes much less time to register. (On the flipside, having a patent affords much broader protection for the patent holder.)
Creating an app, video game or other software can be exciting—and the potential rewards can be great—so long as no one steals your idea. In a world where information travels within a blink of an eye, you can never be too careful about protecting what you’ve created. The good thing is, there are several ways you can protect your invention or original work, and you can always consult with an attorney if you need help deciding which form of protection is best for your intellectual property.
Have you developed an app or other software? LegalZoom can help you apply to register a trademark, register a copyright or file for a provisional application for patent and protect your intellectual property. If you need help deciding which form of protection is right for you, you can ask an attorney through the LegalZoom Business Legal Plan.*
*Available in most states.