Digital by default: Key considerations

 

This time last year the technology giant, Apple Inc, reported that its customers had downloaded to date some 40 billion mobile applications. Remarkably, only five months later, Apple reported that figure to have increased by a further 10 billion [1].

 

In truth, these figures are not entirely surprising given the much reported explosion of big data. Indeed, this seemingly relentless increase in digital consumption is forecast to continue and to grow ever steeper. There is, therefore, no question that the vast majority of us now expect to have the option of conducting much of our lives online and that the successful service providers will be those that adopt a progressive attitude and who invest significant time and resource into developing their means of digital communication.

With that background in mind, local authorities are faced with a significant challenge. They must not only seek to understand and exploit current and predicted technology trends (to meet public expectation) but must also carefully manage their risk and the public purse in doing so.

Website/mobile application development

The above will not come as news to those working in the public sector. Many officers are actively thinking about, or are already working on, developing mobile applications and improving the functionality of their websites.

It is hoped that doing this will not only enhance the public’s experience of interacting with the authority but will also help the authority to deliver the key savings expected of it (by, for example, encouraging end-users to engage in a channel shift from front of house services to digital by default.)

However, as is the case with all well delivered and successful projects, careful planning and risk analysis is required at the outset to avoid argument and delay. Software development is a fertile ground for dispute and authorities may very quickly see the value in their work significantly reduced when a simple disagreement over, for example, intellectual property rights leads to delay and possible litigation.

Food for thought

With the above in mind, the list below contains a selection of the typical questions asked by local authorities when things start to go wrong.

• Who owns the intellectual property rights in my website/application?
• Can the software developer sell my website/app to its other clients?
• Who decides when my website/app is finished to an acceptable standard and ready for hosting?
• Is my website/app breaking any data protection laws?
• What happens if my website/app suffers downtime? Will I get service credits?
• Who owns the content/data generated by my customers and collected by my website/app?
• Can I restrict my customers' use of the website/app?
• Can I force the developer to help me migrate to a new provider if our relationship breaks down?
• I did not agree support charges when the software was developed. Can I force the developer to fix my website/app for free?
• My website/app has not been delivered on time and the developer is charging for fixing bugs. Are these charges reasonable and can I terminate our agreement?
• Can I make copies of the software? If so, under what circumstances?
• I'm worried that I don't have access to the software. Can I demand that the software is put into escrow?

It is not advisable that any of the above issues are ignored prior to the development work commencing. Actively managing these risks at the outset is likely to save further time and expense in the long run.

The first question, for example, is one regularly asked. Whilst the answer may be complex and can vary according to the individual set of circumstances, in the absence of a written agreement, it is unlikely to favour the local authority in the majority of cases.

The Law: In the absence of an express agreement to the contrary, the coding in the website or application is likely to be protected by copyright. In England and Wales, the default position will be that the proprietary rights in the copyright vest with the author (i.e. the developer).

The above position may cause serious problems for any local authority wishing to walk away from a relationship with an existing software developer partner and migrate the services to an alternative service provider. In all likelihood the new provider will be forced to start work over using its own coding. This is likely to result in increased expenditure by the authority.

In the alternative, the authority will risk litigation where the new provider adapts or manipulates the previous developer’s coding (without the previous developer’s consent) in an attempt to save costs.

How can we help?

We can help to identify areas of risk and prepare effective software/website development agreements. We regularly advise organisations seeking to develop a new website or mobile application and prepare suitable Software Development Agreements to facilitate the relationship. These are likely to deal with, amongst other things, the following key issues:

• Data protection;
• Data ownership;
• Acceptance testing;
• End-user licences;
• Limitation of liability;
• Warranties;
• Malware;
• Exit management;
• Hosting/support;
• Software escrow;
• Modular/bespoke software;
• Intellectual property rights;
• Content restrictions;
• Third party software.

Nathan Evans is an Assistant Solicitor in the Technology & Data team at Sharpe Pritchard. He can be contacted This email address is being protected from spambots. You need JavaScript enabled to view it..