One of the most frequent questions I get asked is how a client can protect the ideas in the new mobile app she is creating. The three most common ways of protecting IP are patents, copyrights, and trademarks. Unfortunately, none of these are effective in protecting a developer’s idea. A patent protects an idea but it is highly unlikely that the idea underlying a mobile app—no matter how clever—rises to the level of novelty required for patent protection. So, what about copyrights? Well, a copyright only protects the expression of the idea—not the idea itself. That means a copyright can protect your source code and maybe even the look and feel of your app but not the concept of the app itself. Finally, there are trademarks. Trademarks, however, only protect your brand—not your idea. Is there anything you can do? Kind of. You can protect your ideas before the mobile app is launched using the oft forgotten concept of trade secrets.
So, what is a double-sided marketplace (or, a two-sided marketplace)? We use these marketplaces every day but most people have never heard this term. A double-sided marketplace is essentially a marketplace that brings together two categories of users who need each other to be successful. One of the most familiar examples is Uber®. Uber requires both drivers and passengers; otherwise it would not be a business. Other examples include matchmaking businesses such as Match®, business review platforms such as Yelp®, and sites like eBay® that bring together buyers and sellers.
These double-sided marketplaces are especially prevalent in the mobile app world but these marketplaces have an unusual legal risk associated with them. This risk revolves around the lack of control over the users.
Software as a Service, or SaaS, as it is more commonly known, is a method for delivering software through an internet browser. The user simply types in a URL and then enters a username and password to access the program. This delivery model is very different from a licensing scheme where the user downloads the software from the internet or goes to Best Buy® and buys it off the shelf before installing it onto her own personal computer or company server. There are many benefits to SaaS, such as access from any internet-enabled device, scalability to many users, and automatic upgrades, but along with these conveniences comes a unique set of liability and content ownership issues. Most of the issues stem from the fact that because the software is not installed on the user’s own server, it is not within the user’s direct control.
What do chickens and eggs have to do with trademarks? Nothing, really. I just thought about that question when I was talking to a client who was trying to decide whether he should file a trademark application for his company’s name or his company’s logo first. And, as any good attorney will tell you—it depends—but usually it should be the chicken (I mean, the company’s name). Why should the company’s name be filed first? To save you money.