With modernization the world is now much more connected globally and now there is much more ease of access through various mobile application and software’s, now we can find each and everything in the form of software and application as per the needs and convenience of the public at large, from groceries to shopping, from car wash to home salon, everything in the form of application on your mobile or software. With the increasing use of mobile phones, innovation has shifted to mobile computing and software. Particularly, innovators are striving hard to develop applications running on mobile devices on the go and ease inaccessibility. As the focus is shifting to gain commercial success in developing mobile applications, many application developers are puzzled if mobile applications can be protected using a patent or any act the describes the policies much easier. The Government of India enacted Information Technology Act, 2000 with an objective stating that “to provide legal recognition for the transactions carried out by means of any electronic data interchange and other means of any electronic communication, commonly known as “electronic commerce”, which involves the use of alternatives to paper-based methods of communication and the storage of information, to also facilitate electronic filing of documents with the help of Government agencies and further to amend the Acts of Indian Penal Code, the Indian Evidence Act, 1872, the Bankers’ Books Evidence Act, 1891 and the Reserve Bank of India Act, 1934 and for matters connected therewith or incidental thereto.”

There are certain several legal issues to be considered when developing a mobile application or a software, especially for the start-ups, they have to adhere to the laws like the Tax system (GST), Companies Act, etc. also for those who are looking out for mobile application based company needs to register under the Information Technology Act, 2000, Copyright Acts, Patent Act, etc. it gets trickier, they need to ensure Incorporation documents, Founders Agreement, Business Registration, Vendor Agreement, etc. also they have to juggle through the daily operations with more steps as in funding from the investors. To focus more let us get to the points of Legal Requirements that a mobile-based company or application should ensure in India.

1. Founder Agreement – It is said that the Founders Agreement lays the foundation stone of the start-up or any company. The vesting provisions, co-founders obligations, equity-distribution and also the roles and responsibilities that are the main objective of the Founder’s Agreement.

• Business Registration – Based on the funding and its requirements and the nature of business is decided by having either Partnership or LLP(Limited Liability Partnership) or Private Limited Company. Filings the documents with the Ministry of Corporate Affairs, opening Bank Account, Service Tax or other Taxes Registration( Turnover expected to be above 10lakhs then), PAN (5lakhs and above turnover) are all the parts of the process and it creates a legal entity in the market.

• Employees Handbook, Vendors Agreement, Service Rules – Service Rules are called the basics in any company which enumerate the basic code of conduct for its employees and itself to follow

• Copyright, Designs, Trademark, Intellectual Property Rights, Trade Secrets(Ownership and Infringement) – Intellectual Property rights are created as soon as the idea is formed and the first step is taken into place. The Intellectual Property can be filed as per Section 9 of the said Act. Broadly speaking Intellectual Property Rights are of five types in nature, namely, (i) Patents, (ii) Copyrights, (iii) Trademarks, (iv) Designs, and (v) Trade Secrets.

• App Charges, App Platform and data security – App charges means that if there are any charges to download the app on your mobile or is of free of cost also if there are any in app-charges after downloading the app, must be notified in the details page of the app and shouldn’t be hidden from the customers. Similarly, the App Platform of the App must also be shown, whether it is available only on the Android Play Store of IOS Apples App Store or on Windows Store, or all three platforms. The most important is that of the data security, which means that your data shouldn’t be disclosed to the App Developer or the Third Parties and permissions must be taken in order to seek information from the users like for example of reading messages or collecting storage information, any personal data that is sensitive in nature must be addressed with caution.

• Disclaimer, Terms of Use and Privacy Agreements – All mobile app and software developers need to make their Terms of Use and Privacy Agreements available before entering into the App or downloading as it is the Part of Intermediary Rules of Information Technology Act. The contact along with the Address of the developers must be visible in their disclaimers and also their grievances officers name and it includes huge penalties if it is ignored by the developers, also the Privacy Policy enumerates that what will be done and what not with the data or any information that is of importance to the users while downloading or using the app.  

Authors or Developers of such applications rely on source code ‘open’ to all for usage and development of smartphone applications. The open-source code of the applications is governed by a license agreement, which basically retains protection under copyright in the name of the source code provider and simultaneously also allows the developers to use and add its source code and then distribute the final product of the application. Such applications are thus not recognized as original work and cannot be registered. Instead, the developer is required to provide the public access to open source code along with a copy of open source license agreement with the distribution of the new product. In case of any violation or any infringement regarding the license for source code, the application will be removed with immediate effect from the distribution platform and such a developer shall be liable under the law with cost and penalty.

              As per the Information Technology Act, 2000, Section 72A,  disclosure of any information, knowingly and intentionally, without the consent of the person concerned and in breach of the lawful contract has been made punishable with imprisonment for a term extending to three years and fine extending to Rs 5 Lakhs.

              In the case of ;

Sunil Jain

                                                 Vs

                             State of Madhya Pradesh

(Dated 2^nd November, 2016 M.P High Court)

It was alleged and found that the employees of the Applicant were selling mobile phones using the logo of the ‘Intex’ company, which violated the copyright and trademark of the complainant’s ‘Intex’ Company.

Smartphone applications and software grant an array of platforms for innovators and start-ups to exhibit their intangible creation into a tangible medium and to achieve their goals. An intellectual property specialist can provide and help to get bonafide legal guidance beneficial towards the protection of novel inventions and in the management of such intellectual inventions to achieve maximum exposure and optimum success. 

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