Client Alerts
September 11, 2012

FTC Weighs in on Mobile Apps

Stites & Harbison, PLLC, Client Alert, September 11, 2012

by Stites & Harbison, PLLC

Are you developing an App or assisting someone who is? As soon as you begin distributing an App you are an advertiser governed by U.S. advertising laws and subject to the reach of the Federal Trade Commission. Are you claiming your App performs certain functions? If so, you may need competent and reliable evidence to support your claims.

App sellers should not fall into a false sense of security that small print buried in a "click through" agreement will protect them from advertising liability. The FTC reached a settlement with App developers who sold the Apps "AcneApp" and "AcnePwnr" in Apple's iTunes Store and Google's Android Marketplace, which were advertised to help cure acne. The developers were barred from making the claims in the future and paid cash settlements in connection with the resolution.

The FTC recently promulgated guidelines for advertisers directed to mobile App marketing that set forth basic advertising standards: "Marketing Your Mobile App: Get It Right from the Start." Click here to see those guidelines. The guidelines do not establish new advertising tenets, but remind developers that no matter how small, if they advertise federal marketing laws apply.

False advertising issues are not the only legal issues raised by App development. Privacy laws require careful attention to the manner in which operators use data collected from customers and require particular safeguards with Apps that may be attractive to children. Software licensing and related ownership issues are critical to ownership and ultimately affect revenue streams, but smaller developers may feel they have few options when dealing with a larger company who is willing to market their product. Finally, consumers use trademarks to find Apps and to distinguish among products in a crowded and ever changing marketplace, but trademark issues may be more likely to be overlooked by owners in the context of a virtual marketplace. Copyright and patent laws may protect software or other critical aspects of an App's functional value.

Developing an App typically involves hundreds of hours of time if you are a developer, and tens of thousands of dollars if you are working through a developer. Take the time early in the process to address these advertising and intellectual property issues to minimize the risk of legal exposure and maximize the chances that your investment pays off.

Related Capabilities
Intellectual Property Litigation Intellectual Property & Technology Licensing Telecommunications, Technology & Internet Law