We have experienced an increase in clients launching their own mobile applications for such reasons as supplementing a web-based software offering, operating a customer rewards program, providing a product catalog and account management tools, and many other purposes. This blog entry will identify some of the key issues that we analyze during the development and launch of a mobile application, particularly, issues relating to picking and contracting with an application developer, functional considerations, and considerations when collecting user or application usage information.
When choosing an application developer, one should review the developer’s application development agreement. If the developer does not have a development agreement, we advise our clients to insist on having one. The development agreement is invaluable in ensuring that the desired rights to the application are secured with our client upon completion of the development and providing protections to our client should the completed application not function correctly.
A key consideration in the development agreement is the ownership of the finished application. By default, the developer will own all copyright in any original code written for the developed application. In addition, many of the code components of an application are either open-source (available to the public) components or are generic components which the developer has pre-written. As such, the developer typically cannot and will not assign ownership of the entire source code of the mobile application. Moreover, open-source code components often have their own license obligations, some of which can remove any exclusive rights in the developed software. As such, we suggest obtaining a list of the open-source components prior to completion of the development to review the license requirements of the incorporated open-source components.
If a mobile application includes a proprietary method or functionality (such as mobile software offering), then we suggest that our clients obtain all right and interest into the custom code developed for this purpose. If the mobile application utilizes existing components, but incorporates logos or proprietary information, then a perpetual license may be all that is needed. In any case, we suggest obtaining and retaining a perpetual license in all of the open-source and pre-written components. It may also be desirable to obtain the rights to transfer, modify and create derivative works of the code so that the code of the developed application may be updated or modified in the future, the application may be transferred to a subsequent purchaser, and/or the hosting service provider may be changed.
The development agreement should also separate the development into two or more distinct progress milestones so that our clients can manage the schedule and review the work of the developer along the way. It follows that payments should be tied to completion of these milestones. It is also preferable to retain a portion of the development fee which will be paid upon final acceptance of the mobile application.
Navigating the development and launch of a mobile application is dependent upon the exact purpose and functionalities incorporated in the mobile application.