An application license agreement is a legal contract designed to protect the interests of software developers and those using their applications. When you're a software developer, and particularly a freelancer, you may not always have the luxury of developing apps in conjunction with larger companies who have the benefit of their own legal departments. Even if you are able to take advantage of a legal department belonging to a business for whom you work, there may come a time you create your own independent app and want to trade on its use for payment or an exchange of goods. 

As a software developer, it's important to have a full understanding of software licensing so you know where you stand and what you need to do in the event you develop your own application.

Let's suppose you've developed your own completely unique game, and you're ready to start making money from it. You want to share your creation with the world, and earn a nice profit, but you also want to stay in control, of both who has access to it, and who shares those profits with you.

In a situation like this, you're likely to have a lot of questions. Most developers are not also lawyers or blessed with any kind of legal experience, and it can be easy to run into trouble if you don't know where you stand in legal terms.

What Is Copyright, and How Does it Apply to Software Applications?

You're likely aware that software falls under copyright and can also have licenses, but if you've never dealt with either directly before, it's likely you're not as informed as you would like to be about the mechanics of either. 

Any creative work, including software and any form of application, is copyrighted by law as soon as it is completed. There is no need to file a copyright or pay for it, and in this sense, it is different from trademarking or patenting something. 

Who Holds the Rights to an App I Develop?

While copyright automatically goes to the creator of an app, it is a good idea to have tangible proof that you are the original creator of the work and the date on which it was first completed. In the event anyone ever breaches your rights or challenges your assertion that it is your creation, this is essential to successfully file for damages or get a case against you dismissed. 

Keeping different drafts of your code, dated screenshots of development, backing up a copy to an external source regularly, and even keeping a journal of your progress are all great ways to provide proof that you hold the legal copyright to the work. 

If you created it, you own the copyright, until such time as you sign the copyright over to another party.

It's worth noting that some contracts of employment include clauses that stipulate that you are signing over the copyright to any work created for the employer, and sometimes any work created while employed by the employer, including software developed independently. For this reason, it's important to check any contracts prior to signing them so you're fully aware of who will retain copyrights.

What Is an Application License Agreement?

Once your application is complete, you're going to want people to be able to use it and pay you for the privilege. While you can rely on the generosity of strangers to do the right thing, it's far safer to license your app to prevent it being used or stolen and ensure you receive proper royalties for its distribution.

An application license agreement (also called a software license agreement or End-User License Agreement) is a legal contract created between the creator, author and/or licensor of an app, and the purchaser. The license agreement establishes the purchaser's rights while protecting the creator's interests. 

The agreement details:

  • Precisely when and how the application may be used
  • Any restrictions being imposed on the application

The goal is to clearly outline and protect the rights of all parties clearly and concisely. The majority of license agreements are digital and only presented to the purchaser once they have completed the transaction. 

If you need help with application license agreements, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.