Mini Law Lesson: Law of Apps

Brian Heidelberger bheidelb@winston.com

Info @ www.winston.com/bheidelberger

IMPORTANT DISCLAIMER

• I am not your attorney.• This is not legal advice.

• But … I am a lawyer

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App Regulatory Environment:California AG on the Warpath

California AG sues Delta Over Mobile App Privacy• Airline was one of 100 app makers and companies

warned • California law requires posting privacy policy • First lawsuit brought after 30 day warning by state AG• AG: "California law is clear that mobile apps collecting

personal information need privacy policies"

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App Regulatory Environment:FTC Looking at “Apps” Just Like Regular

Advertising"Acne Cure" Mobile App Marketers Will Drop Baseless Claims

Under FTC Settlements”3,300 downloads of AcnePwner, “Kill ACNE with this simple,

yet powerful tool!”“Mobile App Developer Settles FTC Charges It Violated Children's

Privacy Rule”Apps for the iPhone and iPod touch that allowed users to play

Apps and share information online without prior parental consent

“Mobile App Developer Settles FTC Charges re Privacy Settings”Default set that immediately upon installation the app would

publicly share personal files without securing prior consent.

App Regulatory Environment: Other State Attorneys Generals Also Interested

• N. J. Attorney General Recently brought Claim Against "TeachMe" apps

• Collecting personal information about children and selling it without telling users or asking their parents for consent

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FTC Publishes Guide to Help Mobile App Developers

• Tell the Truth About What Your App Can Do• Disclose Key Information Clearly and Conspicuously• Build Privacy Considerations in From the Start• Offer Choices that are Easy to Find and Easy to Use• Honor Your Privacy Promises• Protect Kids’ Privacy • Collect Sensitive Information Only with Consent• Keep User Data Secure

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FTC Recommendations re Kids Apps

• Provide “key information” through simple and short disclosures or icons that are easy to find and understand

• “Key Information”: what information an app collects how the information will be used with whom the information will be shared if the app connects with any social media, or allows targeted advertising

• Privacy Policy: link on the app promotion page, the developers’ disclosures, or another easily accessible method

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Class Actions re AppsConsumers Sue Major App Developers• Apps "surreptitiously harvest, upload and illegally steal the

owner's address book data without the owner's knowledge or consent”

• Alleges apps upload the entire iPhone address book without user permission on the iOS version of the app

• Against Yelp, Instagram, Foursquare Labs, Gowalla, LinkedIn, Electronics Arts, and others.

Cab drivers Sue Uber • Alleging the company is engaging in unfair business practices by

skirting rules that apply to traditional taxi services

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GPS App Sued Over Cyclist’s Death

• App used by cyclists sued by the family of a biker who died while a trying to regain his downhill speed record on app

• Alleges that Strava was negligent in failing to ensure the safety of its “King of the Mountain” competitions

• Apps ranks the times of riders who take on the same hills while using the app, declaring the winner the “KOM.”

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App Development Agreements

Original CodeClient should own all code, content, and work

product created by developer specifically for ClientTransfer upon creation, not payment

Pre-existing code/tools of developer Client gets perpetual license

Third Party Code/ApplicationsTerms should be disclosed to Client and approved

before agreement executedperpetual use by Client without limitation or

additional cost

App Development Agreements

InfringementIndemnity for patent, copyright, trademark, or other IP

infringementWarrant and represent not infringing

Data SecurityObligation to secure data collected

PaymentUpon acceptance/completion or milestones

InsuranceIP Insurance in place and should name Client as

additional insured

App Development Agreements

• Privacy/Data Security Access to phone contacts, Location data, Other?

• What measures are in place to protect data and gain prior consent?

• Third Party Platforms Will app integrate into third party websites (e.g. social media)

• Is app compliant with such terms and conditions? Will app be distributed through third party platforms (e.g., Apple

App Store, Blackberry App World, Android marketplace, etc?• What are requirements for listing/distribution?• Cost involved?• Is app compliant with terms and conditions of distribution

platforms?

App Development Agreements

CommunicationsTake into consideration application laws (e.g., CAN-SPAM, ACPA, etc)Behavioral advertising considerations

SalesHow will payments be processed?Give share to distribution platform provider (e.g. Apple App Store)

Intellectual Property ClearanceNameConceptContentProduct claimsSweepstakes/contest rules/issues

Children’s Issues