Developing a Business App? Here are 5 Things to Note

Last updated on July 26, 2023

In this time and age, everyone and everything is online. You as a business owner would therefore likely consider developing a mobile application (“app”) to increase the visibility of your business. Apps are a quick way to connect your customers to your business via a direct channel, and the presentation of your business via the app would always be the same therefore ensuring consistency in marketing.

With a mobile business app, there are several legal aspects to note so that you as the business owner can manage any potential challenges and prevent your business from facing fines or lawsuits. We will highlight 5 key legal issues to note:

1) Non-Disclosure Agreements (NDAs)

Whether you are engaging external consultants to develop the business app, or even if you are just developing the app on your own, you should have in place non-disclosure agreements to prevent theft of your ideas.

Non-disclosure agreements are legally binding contracts between a provider and a recipient of confidential material, knowledge, or information. This means your important proprietary information – which may include anything from your business plans and ideas, customer or client databases, sales and marketing plans or techniques, software, passwords, and systems specifications – is protected from publication or dissemination to third parties.

In the specific context of a business app, non-disclosure agreements will particularly assist with keeping your app a secret while it is being developed. Any unique technology or algorithms you may have used to create the app would fall under the category of important proprietary information, and therefore protected from unauthorised publication to competitors. A non-disclosure agreement is especially crucial in the context of patent rights arising from development of new technology, i.e. apps, because public disclosure of a new invention will void patentability of the technology.

Non-disclosure agreements are legally binding, and therefore legally enforceable in a court of law if breached. The owner of the proprietary information being divulged is entitled to claim damages for the breach of this agreement.

For further information, please refer to this detailed guide to NDAs in Singapore. We have also created an NDA template which you can adapt and use.

2) Intellectual Property

You may either develop the mobile app yourself or engage a consultant to do so. During the app development process, many products will be created. These will include your app ideas, content, designs, logos and names, source codes, and more. These are your business’ intellectual property rights, which should be registered or properly documented.

If you choose to engage a consultant to develop the mobile app, it would be useful to have in place an appropriate agreement clearly indicating the owner of these intellectual property rights arising from the creation of this mobile app. This is important because as the owner, you can monetise these rights by licensing or selling them.

If you have created original content like graphics, these would fall under the purview of copyright law. Source codes can also be protected by copyright, as computer programs are defined as literary work under copyright law. If you have created a unique source code for your app, you most definitely would not want a business competitor copying this source code.

Copyright protects your original work from being copied, without authorisation, by third parties, especially competitors. Copyright does not require registration in Singapore, and arises automatically upon creation. Because registration is unavailable, it is important to ensure that copying is prevented by using non-disclosure agreements as discussed above.

However, you should also be careful that your work does not infringe the copyright of others. As long as the other party can show a causal connection between the allegedly infringing work and the original work, i.e. access by viewing, copying may be established. It is therefore prudent to conduct at least a general internet search for keywords describing your work, for example, “swan” if you are intending to design a swan graphic, to ascertain the state of art for such graphics and to ensure that there is no copying. Appropriate due diligence is important because even subconscious copying might be liable for infringement. This means you are found to have copied even if you did not intend to, which usually happens if both works are found to share a high degree of similarity.

Copyright infringement attracts severe penalties – the copyright owner can sue for damages or for any profits made as a result of the infringement. The court can also issue an order, i.e. injunction, to prevent the infringer from further violating the copyright. The infringing individual may additionally be subjected to criminal penalties – a fine of up to S$10,000 per infringing copy up to a total of S$100,000, and/or a jail term of up to 5 years or both.

For further information, you can refer to our detailed overview of copyright law in Singapore. We also recommend consulting with our recommended panel of intellectual property lawyers for further legal advice.

3) Privacy and Data Protection

A privacy policy is particularly important in today’s context with the focus on protecting one’s personal data, i.e. information about a particular person, especially in accordance with the Personal Data Protection Act (PDPA) in Singapore which applies to all personal data collected, used or disclosed in Singapore.

A privacy policy is a statement by your business setting out how it will handle the personal data of your app’s users and visitors. Your privacy policy should ideally set out the steps your business undertakes to protect the information you obtain from these users and visitors, for example, when they create user accounts on your app thus providing you with their personal information such as their names, addresses, telephone numbers etc.

This is important because the PDPA generally prohibits the collection, use, or disclosure of a user’s personal data without consent. Your app should therefore include a notice notifying users of the app that use of your app may or may not result in collection of their personal data, and if collected how such data would be adequately protected.

Severe penalties may be implemented if the PDPA is breached.

For example, a local company which sold healthcare and fitness-related Internet of Things (IoT) devices had a privacy policy in place, but this policy only referenced its website, and contained nothing regarding the collection, use, and disclosure of personal data collected through its IoT devices (weighing machines) and app. It was held that a privacy policy that has no relevance to the app cannot amount to proper notification of data collection of the app users. Any consent obtained in this manner is also invalid. The company was therefore issued a financial penalty of S$6,000 for breaching the PDPA by failing to notify the app users of the collection, use, and disclosure of their personal data before collecting the said data, and for failing to obtain users’ consent.

In the decision by the Personal Data Protection Commission, the Commissioner outlined the following guidelines for a privacy policy for a mobile app:

Aim to enhance a user’s understanding as to why certain personal data needs to be collected, accessed, or shared;
Avoid technical terms and elusive language, be easily readable and understandable, and be of an appropriate length;
Be prominently located on the app;
Consider using icons and/or just-in-time notifications to obtain specific consent dynamically; and
Be reviewed carefully to ensure relevance and accuracy if a standard template is used.

This decision illustrates the strict approach the PDPC undertakes when evaluating a breach of the PDPA. The local company here had a privacy policy in place, but the privacy policy made no mention of the data collected via its app and had references to other jurisdictions’ laws. Also, although the first set of data collected was accepted to have deemed consent (information entered at the profile creation page, i.e. name, email, password, etc.), the second set of data did not, as it contained personal data like weight, height, Body Mass Index, total body fat, etc.

For a more detailed discussion, please refer to this guide on drafting a comprehensive privacy policy for your Singapore website (which can be adapted to those for an app). We also recommend consulting with our panel of recommended privacy/data protection lawyers for further advice on data protection-related issues for your app.

4) Terms and Conditions

Terms and conditions set out rules for the legal relationship between the app owner and an app user. These rules specify the scope of rights granted to the user of the app, what use would be considered acceptable, give proper notice of your app’s intellectual property rights and who owns them, and contain disclaimers limiting your liability vis-à-vis these users.

These terms and conditions should be available for easy viewing on your app. Alternatively, you can mandate the acceptance of these terms and conditions before the use of your app by having the users click an “ACCEPT” button before they can access the app contents. Some common terms and conditions can include:

Licence to use: clarifies that the user is only granting a very limited licence to use the app for personal purposes only.
Prohibited conduct: conduct like harassing, threatening, or intimidating other users, reverse engineering the app, spamming other users etc.
Right to terminate accounts: gives notice of your right as the owner of the app to terminate offending users’ accounts.

For a more detailed discussion, you can refer to our guide to writing terms and conditions (note that while this guide pertains to terms and conditions for websites, it can be adapted to those for an app).

5) Disclaimers

Just like how your terms and conditions may limit liability vis-à-vis users of your app, disclaimers may also shield your app from potential liability. Disclaimers are used to deny responsibility for particular acts or omissions especially those which have no causal connection. For example, you may disclaim any responsibility or liability for any error or omissions in the content of the site. Your disclaimer may be in the form of an informational purposes only disclaimer, and therefore limits your liability for any consequences arising from a user’s reliance on such information.

More specifically, your disclaimers may be “use at your own risk” disclaimers or “no professional/medical advice” disclaimers. This is important if, for example, you are sharing a method that worked for you like a diet plan. You would not want third parties demanding liability for the absence of similar results just because they followed the same diet.

Your app may also contain links to third party content. Again, you might want to have a disclaimer in place vis-à-vis such third party content which may contain omissions of which you might have no knowledge.

Disclaimers should also be placed prominently on your app, with easy access, or linked to or included in your Terms and Conditions.

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Finally, once your app is ready, you will need to distribute this via app stores. It is important to ensure that your app complies with all publishing requirements mandated by these app stores, most commonly Google and Apple. If your app is distributed, downloaded, or used internationally, then we would also recommend consulting with lawyers from these jurisdictions to ensure that the various laws, rules, and regulations are properly observed.

You would notice that considerations around developing a business app largely revolve around confidentiality and liability issues. Confidentiality is important as it protects your rights vis-à-vis the users. You would need to properly consider steps to limit your liability vis-à-vis these users.

For further advice or assistance, please consult the relevant lawyers outlined in the respective sections above.