Impressions from the "Mobile App Economy: Legal and Business Challenges Reviewed" MobileMonday Event

What are the legal and business dos and don'ts when building a successful mobile apps business? Last Monday evening Mobile Monday Brussels organized a round table event about this topic, where legal experts from Stibbe and experts from Agoria and Sirris moderated discussions on:

  • Leveraging expertise: recycling existing features in future projects; ownership and IP protection.
  • Pricing schemes for apps development.
  • Revenue models and mobile payment legislation.
  • Data usage and privacy: collecting and processing personal data, including storing data on the cloud.
  • Fundraising, tax and liability.
  • Fiscal benefits: reducing costs for employees working on R&D.

Three people from the Sirris Software Engineering and ICT group were present as moderators. These are the main highlights from their respective tables:

  • Leveraging expertise: The original discussion that kickstarted this round table was one that was recognized by many of the players around the table: many mobile applications are built on demand by (typically) larger brands (for more background on this, check these two articleson the evolution of mobile application development in Belgium). While currently the margins on such customer projects are high, over time these margins will erode because of more intense competition. One way to keep growing is to leverage "stuff" between projects. Stuff can be many things: code, technical frameworks, even potentially business ideas for new mobile applications. Participants around the table discussed heavily the IP issues around this. Conclusions in short (disclaimer here, this is paraphrased, by no means solid legal advice): source code is protected by copyright law, which means that the IP of source code, unless explicitly agreed otherwise, stays with the original author. One exception to this rule: if the developer is an employee, and the code is written in a work context, there is a strong suspicion that the IP is actually owned by the employer, not the individual developer. Mind that this can have huge impact for agencies working with freelance developers: since freelance developers are not employees, by default IP stays with the freelancers. Another discussed issue was: can ideas be protected? The line there is much more difficult to draw: in Europe, one cannot patent a business process, only technical solutions. The question where a business idea stops and a technical solution begins, is of course vague and subject to discussion.
  • Pricing schemes for apps development: Several parameters were identified that can influence the pricing. Traditional ones are development effort, risk, maintenance cost. Other ones are the value that you offer. A simple app requiring a small development effort might have a tremendous value for the customer, making him/her prepared to pay more for it. You also might consider a pricing scheme that is gradual. Customers usually have decision makers that are very much in favor of the use of mobile apps and decision makers that are very much against it. By having high prices when launching your app you might give the people against it an argument not to make a deal with you. An alternative is to take some risk in the beginning and use a pricing scheme based on the number of users (which of course will be very high in the future ;-) )
  • Data usage and privacy (with Nicolas Roland, Stibbe): Discussions were centered around the different types of personal information collected while running a (mobile) software business and the legal aspects to take care about while processing and storing this personal information. The three main takeaways were: (1) inform the users of your apps through a privacy policy about what data you collect and how you process and store this data; (2) collect the consent of your users on your privacy policy and make sure that you can prove to have received this consent; and (3) be aware of the regulations that apply in your context.

In short, it was an intensive workshop with strong interaction and a lot of burning questions about the legal aspects of building mobile applications.