Setting up and

building it rightA brief legal look at Facebook apps and other matters

@johnhaggisjhaggis@sheridans.co.uk

IntroPart 1 - Starting a company

Part 2 - Legal and Commercial matters

Why start up

IDEA?

How can you protect ideas

Copyright?

Confdential discussion?

Non Disclosure Agreement?

Incorporation

Why use a company?

Incorporation

Shareholders Own the company

Receive proft

Shareholder rights

Directors Manage the company

Employees

Who is involved?

Off the shelf?

OR

SHAREHOLDER AGREEMENT / NEW ARTICLES OF

ASSOCIATION?

• should shareholders be equal (subject to share

amounts)?

•can directors can be removed?

•good leaver / bad leaver?

• retain voting rights on certain matters (unanimous,

majority, veto rights)?

• tag along / drag along for minority shareholders?

•casting vote in case of board dispute?

•who can nominate director?

•plus more...!

• Taxes (VAT, Company Tax, R&D tax credits)

• Annual return

• Board meetings

• Management accounts

Remember though:

• Audited accounts

• Operating budget

• Insurance

• Proft Dividend

• Keep paperwork safe

and one more thing...

• You can structure company set up to protect assets

• Parent company / Operating subsidiaries

Holding Company Ltd

Trading Company Ltd

Your customersYour customers

owns 100%

D1/S1 40A shares

D4/S4 40A shares

D2/S210B Shares

D3/S310B Shares

NB: get independent legal advice!

Legal and commercial matters

What do you need to consider when building you app/product?

I.P.E.E

Identify

Protect

Exploit

Enforce

•Copyright

•Trade mark

•Patent

•Personal Data

•Other

• What is it?

• Who owns it?

• How can I own it?

Copyright

Copyright• Where is it in an app?

Copyright

• Source code

Trade Mark

• Your brand identity (Company and/or product)

• Check IPO.gov.uk - don’t rely on Google

• TM or ?

• Which territories?

• Which classes?

Patent

• Copyright does not protect software functionality.

• A patent could protect your inventive step if you create something new and technical.

• Patent in software is diffcult in EU - easier in US.

Data

• Underlies all social networks / free online services

• Helps monetise services

• Helps understand users interactions - therefore improve service

Data

• Is it personal data?

• Personal data is any data which could be used to identify a living individual

• If it is personal data, then Data Protection Act 1998 applies

So what legal issues involved with data on Facebook?

Data

• As developers you have already entered a legally binding agreement as to how you will manage Facebook data before you even build your app.

Data

• What about in the platform policies?

Data

• So what does this actually mean?

• When the app loads, you set out the uses of the basic user data AND have a privacy policy in place for any extra uses you want to make.

• This is both a requirement under the Data Protection Act 1998 and set out in Facebook’s terms (for the same reason).

Data

• What does Data Protection Act 1998 say about using personal data?

• 8 data processing principles:

• fair & lawful processing,

• obtained for specifed and lawful purposes only,

• obtain only data you need,

Data

• obtain accurate and up to date data,

• can’t store data longer than purpose it is needed,

• process in accordance with data subject’s rights,

• take appropriate technical & organisational steps to ensure processed securely and won’t be damaged,

Data

• don’t transfer outside EEA unless to a country with same security standards. NB USA is not an approved country!

Data• All developers should look at uses of personal data and see if they need to use Privacy Policy.

Most likely you will!

• Privacy policies should be very transparent as to the data you want to collect and the purposes of collection.

Data

• Can you cut and paste someone elses’ privacy policy?

• Benefts of seeking legal advice on your privacy policy?

• Age of data subjects?

• What if you get caught out?

• Register as Data Controller at ICO?

Other

• Where will you locate your servers?

• What is Truste scheme if USA can’t be trusted?

• What commercial points should you consider in hosting agreements? NB standard contractual terms do not mean best commercial position you can get!

• Terms of Use

• Cookie law

Thank you

• jhaggis@sheridans.co.uk

• @johnhaggis