
October 19, 2020
Just as is the case in other parts of the world, the demand for mobile applications in Australia seems to be growing in tandem with the demand for smart devices such as smartphone and phablets, among others. More specifically, according to the Australian Communications and Media Authority (ACMA), 72% of smartphone owners in Australia download at least one mobile application every six months. Most Australians download and use mobile apps to stream video content, access social networking sites, access banking services, play games, as well as access e-commerce sites. If you have an idea that you would like to turn into a mobile application, it would be wise to consider the legal aspects associated with such a decision, including the following:
Business Structure
Before turning your idea into a mobile app, you need to decide what kind of business structure suits your needs. In Australia, you can register a business name or a company. To register a business name, you must choose an entity that will hold the business name. Acceptable entities include a joint venture, an individual, incorporated entity (such as a company), a partnership, or an unincorporated entity (such as a trust). However, a business name does not necessarily create a legal entity. This means that an entrepreneur who opts to register a business name does not enjoy privileges such as limited liability or corporate tax rates. On the other hand, if you register a company, you will benefit from limited liability, corporate tax rates, and you can conduct business throughout Australia without having to register your company in each territory or state. This is particularly important if your mobile app idea involves selling products to consumers.
Of course, you will also have to decide how you would like to operate and run your mobile app business. This means defining aspects such as share structure, officeholders, members, replaceable rules, and constitution. This might seem like too much hassle but it makes financial sense. For example, your mobile app might go viral attracting the interest of investors or other companies interested in a takeover. If you do not have a business structure in place, investors will most likely shy away from investing their money. Furthermore, a business structure such as a limited company protects you from creditors and lawsuits should your mobile app business fold. This is according to the Australian Securities & Investments Commission (ASIC).
Copyright
It is worth noting that copyright would just protect your original expression of mobile app idea but not the idea itself. This means that you can copyright art, literature, film, computer programs, music, or drawings. In Australia, copyright protection spans the life of the creator plus an additional 70 years after the demise of a copyright owner. The Australian Copyright Council recommends that one should put a copyright notice on his or her work. This protects your unique work such as a website, mobile application, graphics, or any other form of creative output.
According to the Australian Copyright Council, a copyright owner has the right to publish his or her work for the first time, reproduce the same in various ways including photocopying, scanning, or filming, as well as distribute published work to the general public via the Internet or through print media. Nevertheless, there is a rule that allows other people to use copyrighted work for the purposes of reporting news or research. However, this does mean that other people can copyright your work for commercial purposes. Australian copyright law prohibits using copyrighted work to make money. Therefore, to protect your app, you should seek legal advice from a lawyer with a good grasp of copyright law before you use someone else’s work as part of your mobile application. In fact, the Australian Copyright Council states that altering a copyrighted image to create a new one could be a breach of copyright law. As you seek to copyright your work, make sure you do not use the creative output of other people in your mobile app.
Trademarks
Unlike copyright, a trademark protects a word, sound, picture, logo, shape, letter, number, phrase, or a combination of all these aspects. The aim is to distinguish your product or mobile app from other apps. Without trademark protection, other businesses can use your unique brand, name, or logo to sell goods or services to unsuspecting consumers.
Think of a trademark as an important part of your mobile app marketing strategy. The more successful your mobile application, the more valuable the trademark becomes. Contrary to popular belief, you do not have to register a trademark to use it. You can use an unregistered symbol or logo to represent your mobile app. The problem with this approach is other people can copy the same logo, word, or number. In such a case, it is almost impossible to stop them from copying your unique name or picture. In Australia, trademarks generally have a lifetime of 10 years after which you will have to pay renewal fees in order to continue using the trademark for another 10 years. This process can go on indefinitely so long as you remember to pay the renewal fees every 10 years.
Before you rush to register a trademark, remember that IP Australia does not just register any name or logo. Instead, it only registers unique items that other entrepreneurs or people do not use regularly. For example, you cannot trademark a common surname or geographic name, so it is advisable to invent your own unique name such as Kodak or Lego. If your mobile application will be available to consumers in other countries, you can access trademark protection through the Madrid Protocol. This international treaty allows Australian entrepreneurs to acquire trademark protection by making a single application. You can file this trademark application in Australia through IP Australia. In addition, you can choose to apply for trademark protection across all or some of the countries that have signed the Madrid Protocol.
A common mistake entrepreneur makes is to register a business name and fail to trademark the same. The fact that you have registered a business name or company name does not give you proprietary rights over it. You will have to go an extra mile and trademark the name if you do not want to face costly legal tussles and claims.
Non-Disclosure Agreement (NDA)
If you will be pitching your idea to a developer, you need to have a non-disclosure agreement or confidentiality agreement ready. This legally binding contract compels a developer not to disclose your mobile app idea or use it to create his or her own mobile app. For example, if you have come up with a data compression algorithm that no one else is using, you do not want to give away your secret before a developer signs an NDA.
A typical NDA contains the following information:
- Time frame for the non-disclosure agreement. For example, the NDA could obligate the developer to keep your idea secret for five years.
- Names of the parties involved.
- An outline of your mobile app idea.
- Legal exceptions and other aspects that do not fall under the NDA.
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