Minimizing the top 3 liabilities for software and app developers

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Software and app developers should be on the lookout for copyright infringement, data breaches, and potential professional liability claims.
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Developing software is like trekking through the jungle – lots of hard work, lots of bugs, and a lot of potential for risk.

If you're not careful, your software could drag you into a lawsuit like a hungry jaguar dragging you up a tree. Why, you ask? Presented below are the three types of liability that pose the largest lawsuit dangers to software and app developers, and steps you can take to avoid them.

1. Handle other people's code carefully to avoid intellectual property infringement

Among software developers, unauthorized use of copyrighted code poses one of most common (and costliest) risks.

Attorney Kimberly A. Spotts-Kimmel, a partner with Gross McGinley, explains that if a software or app developer misuses third-party code, it may be in breach of the license agreement dictating how the developer can use the code.

This means that if you use their code in a way it's not intended to be used, the code owner can sue you for infringing on their IP rights and breaching the license agreement.

These kinds of misuse could trigger a lawsuit:

  • Making unauthorized copies of the licensed software.
  • Allowing unauthorized users to access the licensed software.
  • Copying or incorporating copyrighted code into your own software.

"A developer found to have stolen code will not only have to pay royalties to the owner, but will also have violated various state and federal laws concerning theft of intellectual property," Spotts-Kimmel says. These charges come with statutory fines, which is one reason this type of liability can be so expensive.

When it comes to proving that the source code was copyrighted or that the alleged misappropriation was intentional, things tend to get a little murky. Murky like a jungle river filled with piranhas. That can mean a lot of time in and out of the courtroom, and a lawyer's time isn't cheap.

Take action: Read software license agreements before you decide to use it for a project. If you're thinking of copying code, be absolutely positive that it's not copyrighted already.

2. Test software security to avoid third-party data breaches

Data breaches, security holes, and the resulting losses to end users are extremely costly and can significantly damage a business's reputation. "End users are going to look for someone to place the blame on and seek reimbursement for their damages," Spotts-Kimmel says.

That blame could fall on you if you're aware of flaws in your software. Like setting up a mosquito net to prevent getting malaria in the jungle, why not set up a cybersecurity net?

Take action: You can't always predict where vulnerabilities will appear in your code, but you can do your best to test it. If a client sues you for negligence following a data breach and cites your software as the cause, having errors and omissions insurance in place may provide funds for your legal costs.

3. Write a strong contract and keep records to avoid professional liability

Like most other professionals, software and app developers owe a certain standard of work to their clients (typically outlined in a contract). This standard will depend on the type of services you provide and the scope of the project you're working on. When it comes down to it, you have to meet and uphold the professional standards and quality of work promised by your agreement.

Say the software you're working on takes a lot longer to finalize than you expected. If the client feels misled by your original timetable, they could find another developer…or they could decide to sue you for business sales lost to the delay.

Yikes – bet you didn't see that coming! Just like that jaguar in the bushes.

Take action: A strong contract should act as the reference point for exactly what you're responsible for during a project and help resolve any disputes before things get too heated. Lastly, errors and omissions insurance can provide the means for a legal defense if disputes fester and you're sued.

With these steps and a little luck, you'll make it through your developing career just fine, with a machete – or laptop, rather – in hand.

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