Facebook Developer Garage London July 2011 Event.

1. Setting up
and
building it right
A brief legal look at Facebook apps and other matters
@johnhaggis
jhaggis@sheridans.co.uk

2. Intro
Part 1 - Starting a company
Part 2 - Legal and Commercial matters

3. Why start up
IDEA?

4. How can you protect ideas
Copyright?
Confdential
discussion?
Non Disclosure Agreement?

5. Incorporation
Why use a company?

6. Incorporation
Who is involved?
Own the company
Shareholders
Receive proft
Shareholder rights
Directors Manage the company
Employees

7. Off the shelf?
OR
SHAREHOLDER AGREEMENT /
NEW ARTICLES OF
ASSOCIATION?

8. • 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)?

9. • tag along / drag along for minority shareholders?
• casting vote in case of board dispute?
• who can nominate director?
• plus more...!

10. Remember though:
• Taxes (VAT, Company Tax, R&D tax credits)
• Annual return
• Board meetings
• Management accounts

11. • Audited accounts
• Operating budget
• Insurance
• Proft Dividend
• Keep paperwork safe

12. and one more thing...
• You can structure company set up to protect assets
• Parent company / Operating subsidiaries

13. D2/S2 D3/S3
10B Shares 10B Shares
D1/S1 40A D4/S4 40A
shares Holding Company Ltd
shares
owns 100%
Trading Company Ltd
Your customers Your customers
NB: get independent legal advice!

14. Legal and commercial matters
What do you need to consider when building you app/product?

15. I.P.E.E
Identify
Protect
Exploit
Enforce

16. • Copyright
• Trade mark
• Patent
• Personal Data
• Other

17. Copyright
• What is it?
• Who owns it?
• How can I own it?

18. Copyright
• Where is it in an app?

19. Copyright
• Source code

20. Trade Mark
• Your brand identity (Company and/or product)
• Check IPO.gov.uk - don’t rely on Google
• TM or ?
• Which territories?
• Which classes?

21. 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.

22. Data
• Underlies all social networks / free online services
• Helps monetise services
• Helps understand users interactions - therefore improve
service

23. Data
So what legal issues involved with data on Facebook?
• 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

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

26. Data
• What about in the platform policies?

27. 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).

28. 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,

29. 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,

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

31. 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.

32. 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?

33. Other
• Where will you locate your servers?
• What is Truste scheme if USA can’t be trusted?
• Whatcommercial 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

34. Thank you
• jhaggis@sheridans.co.uk
• @johnhaggis