Table of Contents
- IT Lawyers who speak your language
- What our IT lawyers can do for you
- Our guarantee
If you spend every day at the cutting edge, in the fast-paced environment of innovation and tech solutions, you don’t want to waste time and money educating your legal team.
The technical aspects of your business should be a given and your commercial lawyers are there to protect, expand and maximise your opportunities.
At Rouse Lawyers, there’s no need to teach us about code or what language or infrastructure you use. Our IT lawyers are technology specialists and some are even software developers in their own right.
And we don’t just talk the talk. It’s part of our ethos to implement the latest technologies in-house. We love a good Trello board here and automation is our friend. It’s what makes us lean, mean and efficient as well as putting the firm in the best possible position to offer expert solutions.
How do we know so much about the development world? We keep it close. Aside from our dedication to in-house applications, we’ve worked with clients in areas including:
- web and software development
- mobile device applications
- software as a service (SaaS)
- infrastructure as a service
- website terms & conditions
- integration and platform agreements
- managed services
- cloud hosting services
- privacy and data issues in the online environment
- technology procurement and maintenance
- technology white labelling
- digital advertising
- software licensing and maintenance
- managing major data breaches
- intellectual property protection
- software patents and copyright;
- founder and employee IP assignment, copyright and code;
- technology disputes and litigation.
Our technology lawyers also work closely with specialists in other teams like:
across a local, national and global client network, giving you the confidence that we have all your legal bases covered.
We know software development can be full of surprises but we don’t think your legal costs should be. That’s why we offer fixed fees whenever possible.
We provide a number of engagement models to suit different business structures but they all have one thing in common: whether we are charging a fixed fee or a case-based estimate, you can be sure that you will always have cost certainty.
Rouse Lawyers – Not a Boiler Plate Law Firm
Your software isn’t a boiler plate and your legal team shouldn’t be either. Come speak to the lawyers that will get excited about your projects and want to build a lasting relationship to see you through the cycles of your business.
Give us a call, we’d love to hear about your work. Or maybe we will run into each other at the next pitch night in the city?
In most respects, a contract for software development is the same as any other services contract. There are, however, certain issues specific to software development that should be covered.
Changes to the Scope of Deliverables
Software development projects are particularly susceptible to “changes of scope” mid-stream. Development clients will often change requirements as the concept for an application evolves.
Developers should include mechanisms in their contracts that:
- define what a “change of scope” is; and
- handle changes to the scope.
It’s hard to avoid relying on adjectives like “minor” or “major” when describing what constitutes a “change of scope”. The nature of the project will ultimately dictate what language is best suited to the situation.
It’s a good idea to agree on how changes of scope will be priced before they happen. A common method is to include an hourly rate in the contract such that if there is a change, any extra work done by the developer as a result will be charged at the hourly rate.
Testing and Acceptance
Every software project has bugs but sometimes it takes a while for them to be discovered. Most developers build a “testing and acceptance” period into a contract for development services so it’s clear that they’re not responsible for minor bugs discovered months after they have delivered the finished product.
A typical period for testing is 10 business days after the developer provides the product.
In other words, after 10 business days of testing, the client will be “deemed to have accepted” the product and any bugs that appear after that will not be the responsibility of the developer.
This kind of obligation has the effect of making sure that the client concentrates on finding and notifying a developer of bugs within a reasonable time period.
A Development Agreement needs to have clear provisions about what intellectual property is transferred to the client by the developer.
Most developers license their “background intellectual property” as opposed to assigning ownership.
Background IP is usually defined as slabs of code for certain kinds of functionality that a developer re-uses for multiple clients.
If a developer doesn’t take this precaution, they will be in a position where they have assigned intellectual property to a client and by using it with subsequent clients, they will be infringing on the intellectual property of their previous client.
It’s crucial to release software with a set of Terms and Conditions.
Apple has a legal framework in place for developers publishing software through its App Store.
When a developer releases software through the App Store, unless the developer specifies otherwise, the software will be subject to Apple’s standard Licensed Application End User Licence Agreement (Apple EULA).
The Apple EULA does have some benefits for developers. In reality though, it’s mainly there to protect Apple.
If you’re an Australian developer, the Apple EULA does not take your interests into account.
The most obvious problem is that the Apple EULA is governed by Californian law which means that disputes under the agreement would be ruled by a foreign body of law.
There are also questions about whether or not certain provisions of the Apple EULA would survive scrutiny under the Australian Consumer Law.
Apple offers the option for developers to release software with customised terms (Customised Terms).
While Apple offers the freedom for developers to use Customised Terms, by using the App Store, developers agree to make sure that their Customised Terms take care of certain issues.
iOS developers should be familiar with:
From the perspective of an Australian developer, there are issues with Apple’s EULA. When you release an app, it’s a good idea to use Customised Terms.
The Android System
Apple’s app store has a heavily prescribed process for displaying your terms – the app stores for Android applications are less prescriptive.
The major app stores for Android applications are:
A brief outline of the Google Play legal framework for developers is available here.
These terms should be reviewed to ensure that your Google Play’s EULA is not inconsistent with your obligations to Google.
To publish an EULA in association with an App on Google Play, market standard practice seems to be the simple inclusion of a link in the App’s “Description” and “Contact Developer” fields.
Android developers should be familiar with:
- the Google Play agreements, including the Developer Distribution Agreement and the Google Play Developer Program Policies; and
Amazon App Store
Again, these terms need to be reviewed to ensure that they’re consistent with the EULA that you want to use with your App.
Like Google Play, market practice for displaying an App’s EULA seems to be adding a link to the app description.
Software as a service (SaaS) is defined by wikipedia as a “software delivery model in which software and associated data are centrally hosted on the cloud.”
Notable examples include Dropbox, Google Apps, Evernote and MailChimp.
The efficiency and rapid growth of SaaS is in large part why Marc Andreessen wrote his influential article “Why Software Is Eating the World”.
The legal terms in SaaS are more involved than those in a standard End User Licence Agreement (EULA) since the provider hosts data and provides the infrastructure to operate the software (often provided through a web browser).
Let’s look at some of the areas particular to SaaS that need attention.
A SaaS provider is in possession of their customer’s data. As a result, certain issues must be covered.
- There must be clear provision in the agreement for the “data liberation process” upon the termination of the SaaS Agreement. It is preferable for the costs of such a process to be clear.
- Providers must be clear about what liability they are willing to assume for maintaining the customer’s data. Whether or not the provider assumes liability for data loss is an issue that must be covered as well as what backup regime the provider undertakes to subscribe to.
- Providers need to be clear about which third parties might have access to their customer’s data. SaaS is often hosted on Infrastructure as a Service (IaaS) and IaaS providers like Amazon Web Services often reserve the right to review data hosted by their customers.
- Providers need to understand what kind of data they will be collecting and take appropriate measures if any of it is categorised by the Privacy Act 1988 (Cth) as “sensitive information”.
Term of Contracts
SaaS is always provided in the context of an ongoing commercial relationship between the provider and customer as opposed to the one-off grant of a perpetual licence to use under the traditional software model.
As a result, the agreement’s period is critical. Particularly in the enterprise space, agreements tend to be based on automatically renewing contractual periods which either party can end with a specified notice period.
This approach fits the model of fees based on a continuing subscription.
SaaS providers need to be crystal clear about whether or not they will be responsible for “down time” particularly if they are providing mission critical software.
Many providers take an “all care and no responsibility” approach, other SaaS providers guarantee certain levels of uptime and provide refunds if they do not reach those levels.
Many SaaS providers operate on IaaS services which usually refuse to accept liability. In other words, if downtime liability is not parsed away, the SaaS provider is stuck with it.
Another reason that software (or certain parts of it) can become inaccessible is that the vendor chooses to remove them on purpose.
In a software design environment increasingly governed by rapid iteration and “less is more”, it is important for vendors to reserve the right to make changes to the software if a feature does not get traction and ends up “getting in the way”.
They may find that a small number of customers have come to rely on that feature and are damaged by its removal.
A website is the primary medium for interacting with customers for most technology businesses. Website terms form the basis for the agreement between the website operator and any website user.
Advantages of Website Terms
You need to have website Terms – they allow you to control and exclude risks by defining the relationship with customers to your advantage.
It’s easy to find website terms to copy and paste but it’s very unlikely that they’ll cover all the issues that your particular business needs covered. In fact, you may inadvertently put yourself at higher risk.
We have seen clients operating online businesses in Australia where the jurisdiction for disputes in their ‘pasted’ terms and conditions was California.
One of the most important clauses in your terms is the one that excludes and limits liabilities if you breach your obligations under the contract formed by the website terms.
With the exception of certain legislative mandates that you can’t exclude, you can often limit your liability to the cost of replacement of the goods or services that you provide a user.
If you don’t limit your liability in this way, your liability will be unlimited and any dispute could make your company insolvent.
Jurisdiction for Disputes
Another important consideration is clearly defining the jurisdiction for any dispute between you and your users to the most convenient Courts.
This is a significant disincentive for a customer in another country to start legal action against you since they would need to litigate in a foreign jurisdiction.
Without such a clause, there is no reason that a user cannot sue you under the laws of the United States, obtain a judgment in their favour and then enforce the judgment against you in Australia.
New Business Models
Every business model is based on relationships between transacting parties who have certain rights and obligations.
It’s important to critically assess the relationships created by your business model, particularly if it’s a new kind of business.
The Internet is a vast laboratory for experimentation with new business models but the corollary of such opportunity is that businesses need to pay attention to unusual legal risks that they might be exposing themselves to when they put up their website.
You should ask your lawyer to assess the risks of your business model. It’s important to do this because it is not unusual for legislation to impose rights and obligations on parties that they themselves never actually agree to.
To sum up, you should always get a lawyer to draft website terms for a website because:
- your company needs to limit its liability; and
- the risks of new business models should be examined.
If your business collects information about customers or users and stores it electronically (almost all businesses do), you need to consider privacy law.
The storage and use of “personal information” is covered in Australia by the Privacy Act 1988 (Cth).
The definition of personal information in the Act is very broad (and imprecise): personal information is any information that identifies a person or could be used to identify a person.
This includes obvious categories of information like names and addresses but reaches as far as information like dates of birth and post codes in circumstances where data can be cross-referenced to deduce someone’s identity.
The recent changes to Privacy Law make it a far more pressing consideration for Australian businesses – a regime that has been criticized as “toothless” now includes fines of up to $1.1 million for breaches.
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Team Leader: Matthew Shearing
Matthew Shearing is a technology & business lawyer who joined the Rouse team in 2019. His passion is helping individuals and businesses understand, manage and overcome the challenges of doing business in the digital age.
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