Questions

What legal safeguards should be in place for the limited release of an app in Beta?

We are about to release a new app in Beta version to a limited number of users. We rely on them to give us final verification and feedback on the app, and later to be ambassadors of the final release. Should we consider a formal, legal agreement with these users that specifies things like: -no redistribution -no transfer of ownership -anything else?

6answers

Why do you need safeguards at this point? You should be figuring out if there is even a demand for this. We did this with the app we launched and didnt have any problems. Let me know if youd like to discuss more. You shouldnt be wasting money on legal fees at this point.


Answered 5 years ago

I am a lawyer experienced in drafting and negotiating licensing agreements. I'll try to address your question and points made therein through the following brief notes:
1. You should consider having an agreement, in the form of a software license or software subscription agreement (the latter applicable to SaaS model), not only for the released product but also for you Beta version (the "Beta").
2. Such an agreement should clearly state your ownership in your software and the specific licensing terms (whether Beta or "production" version); such terms would address restrictions on transfer and re-distribution.
3. I would include terms regarding limitation of liability, confidentiality, use of data and exempted warranties.
4. In a Beta context I would recommend clarifying (in the agreement) the following points: (a) you will have no liability for any harm or damage arising out of or in connection with the use of the Beta; (b) use of the Beta is for evaluation purposes only and may not be supported; (c) the evaluation is for a limited time, you may discontinue the Beta at any time and the user may loose all their data inputted during the trial period; and (d) any usage information regarding use of the Beta , such as results, comments, or suggestions should be deemed non-confidential to the user and usable by you.
Please note that the above notes are based on very limited background and should be examined in the context of the specific facts. Happy to get on a Clarity call and further discuss this matter.


Answered 5 years ago

Unless your application is something you'd have to submit through the FDA or other regulatory because its use could impact health, all you should need are disclaimers. You aren't giving the person source code. You are asking them to take time from their schedules to try out your offering and to give you feedback that will hopefully help you to shape a product that is of more value and that users will want to use. It's not a final application and unless it's extremely high value per unit (1M / unit) it's not a true product, you're not losing any customers even if they give it to someone else, you're simply getting someone else to give feedback on your product. If you're worried about someone copying it, unless you're at the forefront of a very competitive industry, where a competitor will put a lot of engineers on copying and improving what you have immediately, there's no need to worry about your app being disseminated by users. If you don't want more user feedback, you can ask your users to not distribute it. And then you can ignore if someone else gives you feedback beyond the limited beta.

You can find typical disclaimers that you include with your product by looking at commercial product. This essentially states that people are aware that this is not final product, their data is not safe, they should back it up, that the product will have bugs, and that they are offered it so you can get feedback to improve your product.

I don't know your product so cannot guess beyond this as to other potential issues that might make you ask the question above. Please feel free to give me a call to discuss if you would like to go into this in more detail.


Answered 5 years ago

I commend you for the question as I’m sure there have been countless inventors who fail to consider this! You could follow Gal’s route and draft some sort of licensing agreement. However, as a bootstrapped startup, I agree with Nora in that more simplistic intellectual property protection would probably suffice.

There are cost-effective routes that can provide robust intellectual property protection for you. Confidentiality agreements and trade secret protection can work very well, especially when combined with exceptional innovation design and speed. This type of contract should establish ownership of the app, limit usage of the app to the “limited release” time period and to that particular individual, limit your startup’s liability, describe the ramifications for misuse of the product, and provide a forum for disputes. It is worth noting that all employees, board members, advisors, and outside testors should be required to sign agreements obligating them to assign all business-related intellectual property to the company. You will also want to extend IP protection through agreements with non-employees, including vendors, outsourced designers, engineers, and counsel, as well as testing facilities.

We at www.lawtrades.com help clients select the route that makes the most sense - whether it’s a regular utility or provisional patent, licensing agreement or trade secret protection. It can be daunting, no doubt, but an experienced attorney can save you lots of money and time, while helping you to add value to your company. Innovation in the legal marketplace is no doubt occurring, but not fast enough to help the person or business that needs immediate legal assistance at a price they can afford. LawTrades was established to meet these needs by providing effective and economical solutions. Hope that clears things up a bit. Feel free to message me directly to chat further about any other IP questions that you face.


Answered 4 years ago

I would use a simple, straightforward beta license agreement. In practice I've never seen one of these litigated, but it can't hurt to disclaim all warranties, put the user on notice that things may be buggy or crash (coffee is hot too), and make it clear that you have the right to incorporate any user feedback into future versions of the software.


Answered 5 years ago

I am a corporate lawyer for startups, and advise on this type of issue frequently. Even though users don't get source code, they are privy to proprietary information, so your concern is legitimate. There are good suggestions in this thread of the types of legal concerns you might have and how to address them. I would suggest that, whatever language you end up using, you can incorporate it into "terms & conditions" and use a "click-wrap" structure to implement it. This is pretty standard "check here if you agree to our terms & conditions" box. It's unibtrusive, and an important part of protecting your company's confidential information and trade secrets. Happy to chat further.


Answered 5 years ago

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