Mini Law Lesson: Law of Apps Brian Heidelberger

IMPORTANT DISCLAIMER I am not your attorney. This is not legal advice. But … I am a lawyer 2

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" 4

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 6

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 7

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 8

Class Actions re Apps Consumers 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 9

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.” 10

App Development Agreements Original Code Client should own all code, content, and work product created by developer specifically for Client Transfer upon creation, not payment Pre-existing code/tools of developer Client gets perpetual license Third Party Code/Applications Terms should be disclosed to Client and approved before agreement executed perpetual use by Client without limitation or additional cost

App Development Agreements Infringement Indemnity for patent, copyright, trademark, or other IP infringement Warrant and represent not infringing Data Security Obligation to secure data collected Payment Upon acceptance/completion or milestones Insurance IP 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 Communications Take into consideration application laws (e.g., CAN-SPAM, ACPA, etc) Behavioral advertising considerations Sales How will payments be processed? Give share to distribution platform provider (e.g. Apple App Store) Intellectual Property Clearance Name Concept Content Product claims Sweepstakes/contest rules/issues Children’s Issues