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Before you launch that awesome iPhone app, make sure you've understood your legal obligations and responsibilities

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So, you have a great a great idea for an iPhone application. All you want to do then is get on with it and ace your rivals. Development of the app, understandably, takes priority.

Not that fast. You might be better off thinking through the entire gamut of consequences — most of all the legal ones that could haunt you for years.

First and foremost, be mindful that an application creates legal obligations — not only between you and Apple but also between you and the end user. It’s not enough to merely fulfil the technical and legal requirements imposed by Apple’s app store. You need an effective end user licence agreement to address the legal obligations arising out of your app.

Have app, manage risk

Every app sold, or even given away free, to users contains a risk. It is important to consider the potential issues that might arise from the app you are building. Some applications (e.g. games) will be fairly low risk, while others (e.g. location services) might have more serious consequences.

Consider, for example, an app incorporating third party location services to track business assets and capturing reference data for field work. If the location is incorrectly displayed or if assets being tracked are recorded incorrectly, the end user might suffer a loss of time or money — loss for which you could be held responsible.

Also, if the application used a third party’s information (e.g. Google Maps or Open Street Maps), depending on what and the extent to which it is being used, a provision in the licence agreement might be required to deal with the use of such third party applications.

Apple offers a standard End User License Agreement (EULA) that you can adopt as part of the iPhone development approval process. As license agreements go, the current version covers most of the standard issues.

It is a generally worded document and it does not cater for specific iPhone applications that have their own requirements. Consequently, you need to ensure that your end user licence agreement addresses the potential risks not covered by Apple’s standard agreement.

If your application incorporates third party location services (e.g. Google Maps), your application’s terms of use may need to ensure that users also agree to be bound by Google’s terms of use. This can, perhaps, be done by incorporating pop-up windows in the application with a link attached. You may also need to ensure that copyright and trademark notices remain on the third party’s information displayed in the application.

An additional point you may need to determine is whether you have to keep up-to-date with the third party’s terms of use, which may change over time. For example, an application that uses third party maps may have a limit to the number of daily downloads, which may reduce over time forcing you to subscribe to a premium service allowing greater downloads.

If you do not keep up-to-date with the terms of your use of the third party application, you could find your application in breach of copyright or a third party’s terms of use. It is, though, possible that you can use technology to ensure compliance with regard to downloads or other issues.

In conclusion, businesses need to be aware of the potential risks posed by the development and distribution of an iPhone application or indeed of apps developed for other platforms including Android, Windows or BlackBerry. Properly drafted licence agreements tailored to the particular circumstances of your application will help manage the risks arising out of your application.

Joe Kafrouni is a renowned business lawyer with the firm of Kafrouni Lawyers, based in Brisbane. He frequently provides legal advice on his blog.

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