Scintilla – a flash, a spark, an iota. Shorthand for creativity and an indicator of inventiveness under Australian law.






Wednesday, September 17, 2014

Have your candy (crush) and eat it too – legal issues in app development

By Tracy Lu, Associate

In 2008, with Apple's launch of the App Store, a brand new market for mobile apps was born. This article discusses some of the legal issues which may be involved in app development.


Confidential information


Being the first to come up with a knockout idea is sometimes critical to the success of an app. However, copyright laws do not afford protection to concepts and ideas, but only their expression. Therefore, when sharing ideas with others, such as during a pitch for funding, it is prudent for the parties involved to come prepared with a well-drafted confidentiality agreement.


Privacy


Where personal information is collected through an app (such as during a registration process embedded in the app) in circumstances where there is an 'Australian link', obligations imposed by the Privacy Act 1988 (Cth) must be complied with*. It is required for collectors of the personal information to make public a clear privacy policy which deals with certain issues as prescribed by the privacy laws.

Further, obligations under the Spam Act 2003 (Cth), which include to not send unsolicited commercial electronic messages without the recipient's express or implied consent, to offer an unsubscribe facility in such messages and to provide details in the message about the sender, may also apply. Breaches of the Spam Act have serious consequences, particularly for persons with prior records of breaches.


In-app ads and in-app purchases


Careful attention must be paid to the way in which ads and in-app purchase features are incorporated or function within the app so as to minimise the risks for a claim of passing off or misleading or deceptive conduct to arise.

The ACCC conducted a review in late 2013 of more than 340 of the most popular free game apps targeted at children and found more than 75 per cent of failed to state that real money could be used to make in-app purchases. It has released a guideline for consumers on in-app purchases, including how to seek a refund from the relevant distribution platform.


Cloning wars


A unique and concerning phenomenon which has emerged in relation to apps, particularly game apps, is the prolific amount of cloning which takes place, with copies emerging sometimes within a matter of days after the launch of a successful app. This is best illustrated by the explosion of Flappy Bird clones following the removal of the highly popular game by the developer.

One way of seeking protection against clones is to file trade mark registrations over the original game's title, as game publisher King has done in respect of its highly successful Candy Crush Saga games (it has a EU trade mark over 'Candy' and a US trade mark over 'Candy Crusher').


Patent protection


App functions may be patentable subject matter. For example, a new user interface may provide improved functionality or speed - of use, of processing, or something else. In order to preserve the invention's eligibility for patent protection, it is important for potential applicants to ensure that the invention is not publicly disclosed prior to an application being lodged. In Australia, there is a 12-month grace period during which the invention may be publicly disclosed, provided that a complete patent application is filed before the expiry of that period. However, the same grace period does not always apply in jurisdictions other than Australia, in which case an inadvertently premature public disclosure of the invention in Australia may affect the patentability of the invention in another jurisdiction.


Registered design protection


Registered designs can provide supplementary and/or fall-back protection for various parts of an app, importantly, major parts of the user experience. Registering a design can be achieved quickly and for only a very small investment – so they are readily accessible to developers large and small.

A registered design protects the visual features, including the shape, configuration, pattern and ornamentation of a product. It could apply, for example, to the visual appearance of one, or the arrangement of several, buttons or icons on an app or the overall look of a landing page on an app. The owner of a registered design can prevent other persons from making or selling a product which embodies the same or a substantially similar design. Like patents, it is important that the design is not publicly disclosed prior to an application being lodged. However, unlike patents, there is no grace period available in Australia. In Australia today it is not clear whether a GUI on a screen is proper subject matter for a registered design, but there are more than 1000 already registered but not yet certified on IP Australia's databases, in anticipation of a clarification of the law. The situation is presently being reviewed by ACIP.


Piracy


Apps are making content, including infringing content, even more readily accessible to a large group of consumers because they are incredibly easy to use and therefore they are another space in which copyright owners must vigorously defend their rights.

Piracy concerns are not just limited to content which can be shared via apps but extend to apps themselves. In Australia, under section 116AN of the Copyright Act 1968 (Cth), it may be possible for an action to be brought in respect of the circumvention of access control technological protection measures which takes place in the course of producing pirated apps, although the application of the relevant provisions to apps is yet to be tested.


What's in store for the future?


So, where to from here?

For governments, the challenge, as always, is to provide sensible legislative solutions to address new questions which arise in new industries like the apps industry as quickly as possible. For businesses, it is about streamlining their legal strategies to best protect their position under the existing legal framework along with taking innovative, commercial approaches to rights management in an ever-changing landscape.

* Obligations imposed by the Privacy Act 1988 (Cth) do not apply to 'small businesses' whose annual turnover is $3,000,000 or less.

(Portions of this article were first published in The Australian Internet Law Bulletin, Vol 17 No 5 p98)


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