Mobile App legalities

Do these 8 things before launching your app!

In Creative Entrepreneurs by Shannon Montgomery

Silicon Valley, tech startups, mobile apps, and scientific advances that are often too good to be true (looking at you today Theranos). Technology has never really been my thing, but helping young entrepreneurs is and if the people want to build apps well then, I want to help them do that.

Today’s article is inspired by a recent client consultation that admittedly required I do a tiny bit of research before hopping on the call. I knew most of what I needed but wanted to confirm what cracks I might have had in my knowledge base. After I finished the call, I decided to put together a quick list with minor explanations of the things we discussed to hopefully help other techy savvy app designing potential clients in the future. Of course, this is not an exhaustive list of what someone needs to do when building and starting an app but this will get you started in the right direction, and maybe convince you that you need a team of people around you, and that team probably needs to include an attorney.

So you have an idea for an app??

What to think about when you’re getting started. 

1. Do your preliminary branding search: This one you know because I talk about it all the time. This is the same for anyone I work with. If you are starting a business or building an app do the proper research to ensure you can use the business/app name you want to. Make sure it isn’t in use, and it isn’t already registered with the USPTO. If you fail to do the research now, you might be forced to rebrand later. And by that point who knows how much money you’ll have already spent.

2. Pick, and set up the proper business entity: Some people have different opinions on this as to when you should incorporate your tech startup. It seems to me that if you are going to seek investors, then it is relatively important you have this part done prior to that. So, get with a CPA and an attorney to determine what route you want to take. This is most likely going to be a C or an S corp. but it really depends on you and your situation.

3. Have a very thorough partnership or operating agreement in place: This is an extremely important step. If you are working with a partner, or a few partners your agreements need to be as detailed as possible. Think over what rights and responsibilities everyone will have, what is being put in by each person, sharing profits/losses, making decisions, selling your portion of the company, what happens if you die? I could go on and on. The best thing to do is sit down with the people you are going into business with and talk it over. Nail down your ideal working relationship, and how you will exit the relationship, and then find an attorney to sit down with to draft up the agreement. This is imperative to protecting you and the company.

4. Have strong employment agreements in place: If you will be working with third parties to develop the code for your app, do the design, manage the marketing, and so forth you need strong contracts in place with all of these parties and possible employees. These agreements should include clauses covering confidentiality and intellectual property protections and where applicable possible non-compete language. Non-competes aren’t allowed in every state so keep that in mind. You want to make sure that anything produced or developed by someone you work with becomes the property of the company and doesn’t accidentally stay with that third-party creator. So again, get with an attorney to ensure these are drafted properly.

5. Use of Non-Disclosure Agreements: It is pretty apparent that investors in the tech world are not going to sign an NDA for you. And that seems to be fine. Don’t worry about that. However, anyone else you work with on bringing your idea to life can and most likely will sign an NDA for you. Having one on hand to use in the right scenario is beneficial.

6. Document the investor due diligence review: Before an investor will invest in your company, they are going to perform an investigation into the company, you, and anyone else working with you. This is a rigorous process but one that must happen before an investor will give you any type of investment. Document this process. Keep track of what is given to the investor, the interviews they perform, and any other correspondence during this period. Be prepared for the review, and be prepared to show exactly what happened during that review.

7. Have online privacy policies and terms of use: If you’re working with an attorney they will be able to draft these for you and ensure that the terms of use is presented in the proper way on your app. I’ve previously written about both of these subjects, and how to make sure the terms of use is legally binding. So be sure to go back and check those articles out.

8. Intellectual Property Considerations: You will want to protect your brand and product through registering the copyrights and trademarks. You can copyright source code and you will definitely want to do that as soon as you can. Trademarking your brand name, logo, and app icon can wait a little bit once you see how successful the company becomes, but you will want to apply for these eventually. Talk with your attorney to determine when and what you need to protect.

Again, this is not everything. This is just a small list of what to think about before you start doing any real work on turning that genius app idea into a reality. If you have more questions or are interested in working with me, email me at Shannon@montgomerypllc.com.

 

Please note that this is not meant to be legal advice for you or your situation, this is merely some legal research and knowledge on the given topic