03 Jun 2016

Working with software? Be warned: bad terms are creepy

EIP intellectual property lawyer Tristan Sherliker has some words of wisdom for lawyers working on terms and conditions for smartphone apps and other software.

Vladamir Nenov Vladamir Nenov

If you’re like me, when you download an app you spend more time counting the review stars than looking at the small print. Ignoring the T&Cs and pressing ‘install’ takes less than a second… but if you did read what you were agreeing to, how long would it take?

Well, last week the Norwegian Consumer Council (Forbrukerrådet) tested it. Working in shifts, a team read out loud the terms of the 33 apps on the ‘average’ smartphone, ranging from games (e.g. Angry Birds), media (Netflix, YouTube), social media and utilities.

It was a continuous live stream of legal drear, and took a cheerless 31 hours and 49 minutes.

What’s the point?

It’s no surprise that people don’t read the small print. Legally, the general perspective is that a person who ignores terms takes a risk. There may be something in there they don’t agree with, but they have decided to ignore that possibility for their own reasons, usually lack of time and aversion to boredom.

The Forbrukerrådet’s point is simple: 'we have an agreement regime that does not work'. They are right when they say that few people, if any, have enough time to read themselves what they agree to when they press OK. 

Terms can be enforced even if they aren’t read. It’s an unrealistic system, and at least in that sense the system is 'broken'.

If the point of the story is that the system is broken, the moral for lawyers is to take a practical approach to fix it. This is especially true in the digital world, where games, media and other software are distributed to all areas of society, globally.

Here are some key issues to consider when drafting terms:

Don’t ask what you can get away with

A lawyer should act in the best interests of their client. But this doesn’t mean that T&Cs should be one-sided – the software owner should benefit from certainty without hanging their users out to dry.

A one-sided agreement might be appropriate in some situations, but they are rare. The point of a contract is to set out the relationship between the parties so they know where they stand and mutually benefit. This will usually require a balance between the rights of the user and the software owner.

Instagram famously got this balance wrong in 2012, when it was reported to change its T&Cs so that it could make use of any images – an unlimited licence giving them total control over its users’ photos. By then, the same was already true for Twitter, to much scandal.

Instead of only advising clients on the most stringent terms they can get away with, lawyers should be familiar with the user’s experience of an app (including the UX), how it fits into a user’s everyday life and what the user will expect from the T&Cs. By considering these issues, a lawyer can work with their client to keep them out of ‘digital data’ scandal stories.

Bad terms are creepy

When a software project is new, nobody can predict where it will end up, and sometimes its terms have to be drafted very generally to cover a variety of circumstances.

But in some cases, non-specific is just plain creepy. An app that tracks your movements and messages can learn things about you that your employer, friends or spouse don't know. How will this data be used? If the terms allow it to be sold or shared without limit, that’s a pretty scary thing to sign up to.

Terms can’t list out every single use, so the temptation is to go general. If you’re doing that, consider instead specifying the type of use that will be made and listing out some examples. Consider with your client whether it will be better to have a limited permission at the start, and update the terms later with any changes that might be required from time to time.

Digital and IP go hand in hand

The software world deals in digital concepts – electronic data, photos, privacy, etc. Since there is nothing tangible at all between an app and its customers, intellectual property takes on more significance in the digital space than perhaps any other.  This means that IP concepts will lie behind a huge proportion of terms.

IP issues can arise in a number of ways. It’s not just the data a user uploads into the app (such as Instagram’s photos), but also the data collected about the user, and even the way they use the software itself – such as creating artworks in image editing software, or publicising gameplay footage.

In fact, IP drives digital terms to such a huge extent that it’s advisable to work out the IP factors and decide on the position before beginning to draft anything. Then, the requirement for terms will often flow out of that.

Kill the jargon

It’s old advice, but still good. Avoiding jargon is difficult, because inevitably terms will be picked apart by lawyers. Legal jargon does have its place – in court, to make things precise – yet has almost no place anywhere else.

So, if you can avoid flowery language, do it. It will make your terms easier for your clients, and easier for their customers to understand.  If jargon is impossible to avoid, consider having a summary of terms alongside, in plain language. This has been used to good effect by a whole range of businesses from games to banks – just make sure that it’s clear the legal version, not the casual version, is the legally binding part.

Tristan Sherliker is an associate solicitor and IP law specialist at EIP Europe LLP, London. Tristan advises on IP planning, strategy and enforcement issues, particularly in relation to software, electronics and digital IP. 

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