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Why You Need an API License Agreement

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Some companies may open up their API to third party developers without an API license agreement (“going naked”), however this can cause problems and lead companies to later need to create a license and restrict what developers are doing. This article uses Twitter as an example. Twitter previously had given developers very liberal access to their API, but developers were using their API to duplicate their interface and compete with them, so Twitter made changes to its API Agreement.

The article points out that API license agreements are important because circumstances can change, and the Agreement can protect the API owner if changes need to be made to either the type of access developers have to the API, or to the API itself. It can also allow the owner to set the expectations and standards it has for apps developed by third parties. The Agreement usually contains terms that permit the company to unilaterally amend the Agreement at any time, as well as limitations on liablity.

Returning to the Twitter example, without an API license agreement containing limitations on liability and allowing it to make unilateral changes to the agreement and to developers’ access to the API, Twitter’s changes would have exposed it to lawsuits by developers who relied on the API for the continued existence of their apps and businesses .

Read the article here.

Take away:

  • Having an open API without a license can lead to copy cats and new competitors for your business. This article outlines some of the benefits of having an API license agreement.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Open Source Code (API) Allows Your Community to Give Helpful Feedback

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When drafting an API licensing agreement, it may be prudent to consider that the less one-sided the restrictions are, the more the API will attract innovation by open source developers.

This article discusses the success of Joyent, a company that emphasizes open source code. In an interview with their CEO, the CEO emphasized their business model which is that open source is the most important part of infrastructure software today. “Open source is an approach that works, and we’re sticking to it.” It allows the community to give feedback and innovate, benefitting the company in the process. Moreover, Joyent supports the Node.js Foundation project which is a platform to build cloud management software. The use of foundations to govern the development of open source platforms encourages neutrality and balance among the community stakeholders – the vendors, contributors, and users. According to Joyent’s CEO, ” it’s part of the new era of open source foundations, one in which corporate neutrality, transparency and innovation are the guiding values.”

Read the article here.

Take away:

  • Restrictions on the use of the API are needed to protect the security of the software, the website, the users, and the data associated with the site, but companies who wish to encourage the growth of a third party developer community should use legal restrictions in a way that does not seek to exploit (and discourage) the third party developers.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Licensing of Open APIs

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The article discusses the objectives and benefits of an open API license, which are similar to a software license. These include defining the extent to which the API can be used without constituting an infringement of the provider’s rights, and limiting the liability of API providers in case of any failure of the API.

This article also describes various clauses which should be included in an API license agreement, and gives examples of these clauses from current open API’s. These clauses include scope of rights; attribution; non-commercial use; information rights; financial terms; warranty; and limitation of liability. The article points out that “combining services and data from multiple sources raises several issues related to intellectual rights in mashups”, and notes that many of the service and data providers are “unclear about the relevance of these issues”. Service and data providers will be relying on the advice of counsel to draft API agreements that balance the interests of stakeholders, and adequately protected the API provider.

Read the article here.

Take away:

  • The API agreement should clearly define the scope of the use of the API, and limit the liability of the API provider in case of any failure of the API.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Apple’s Licensing Restrictions – Do They Violate Competition Laws?

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Apple’s Licensing Restrictions – Do They Violate Competition Laws?

Apple’s streaming music service has attracted a great deal of attention, from both music lovers and consumer interest groups alike. US Senator Al Franken requested a review of Apple Music by the US Federal Trade Commission, expressing concerns that the combination of Apple’s App Store and its iOS software will chill competition in the music streaming market. Senator Franken argued that “Apple’s position as a dominant platform operator may actually undermine many of the potential consumer benefits of its entry into the market.” To underscore the Senator’s concerns, Apple Music comes preinstalled on the latest version of Apple’s operating systems. Where does this leave the competition?

In order for the competitors to get their music onto Apple devices, they must rely on apps sold through the Apple App Store. The Apple licensing agreements restrict companies from using their apps to inform users that lower prices for music streaming are available through their own websites; to advertise the availability of promotional discounts; or to complete a transaction directly with a consumer within their app.

It is unclear whether these restrictions will be found to have an anti-competitive effect, in breach of US and European competition laws.

Read the article here.

Take away:

  • Depending on the commercial context, some licensing restrictions can attract anti-competition scrutiny by regulators and consumer groups.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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The Shut-Off of Twitter’s Firehose is a Hazard of the API Economy

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Since Twitter will no longer be selling its firehose data (full, unfiltered stream of tweets available from the service) to third party sellers, but will license the data to users of its API, it is important to be a licensee/subscriber to Twitter’s API set in order to access the huge amounts of real time-data that Twitter has to offer as a social media giant. The author writes that Twitter is determined to generate more revenue by turning its data stream into a licensable resource for real time sentiment analysis, and if they do so they will become an API King in the economy as a source of real world data. However, the remainder of the article notes the negative impact of this decision. Ben Kepes of Forbes describes the plan as an “evil move, by a company with a long history of making moves that are counter to the best interests of its ecosystem.” Steven Willmott of 3Scale also described the idea as “innovation destroying”.

Read the article here.

Take away:

  • Successful businesses that rely on access to an API need to carefully consider whether they should attempt to negotiate changes to the terms of the API license, with the objective of ensuring continued access to the API for their business.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Market Pressure May Ease Data Restrictions

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Controlling the license of the brand is important for both the licensor and the licensee. An API license allows a licensor to increase its brand recognition. If developers can develop apps based on the API and attract good traffic, the newly developed app may add synergetic value to the branding of the licensor. But a delicate balance needs to be struck so that on the one hand, the brand is not misused, and on the other hand, the third party developers have an incentive to build on the brand’s API. In an abrupt move in 2012, Twitter shut down all access to its developer API. That policy was short lived, and has been reversed. This change has been described “as going from the flies surrounding a buffalo to the fish that live symbiotically off of a shark”. Twitter now views third party developers as a potential pool for talent and technology. VC investment in the developer community has pushed Twitter to loosen data restrictions, and may result in other changes to the licensing restrictions commonly imposed on developers.

Read the article here.

Take away:

  • Marketplace changes and growing investor confidence in the developer community may result in modifications to the data restrictions contained in API licensing agreements.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Passionate Users Will Appreciate an Excellent API Licence

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If a social media site wants to attract attention or encourage community participation, it may consider giving API licences to third parties. This way, passionate members can transform their ideas into reality and benefit the application.

This article focuses on Google+ and its popularity when compared to other social media sites, such as Twitter. It notes that Twitter has gone through losses in popularity by limiting and turning off their API access at times and suggests that Google+ should be one of the first of social media sites to offer an amazing API for users. The article gives 10 suggestions for improving Google+ and concludes that many of the suggestions could be implemented by third party companies if they had the right kind of API access “and could spark a hundred new ways to engage with people on Google+.” According to this article, the types of restrictions and policies imposed by Google+ are needlessly inhibiting use of the site.

“It’s not about Google increasing engagement on Google+. It just needs to get out of the way and let it happen.”

Read the article here.

Take away:

  • Offering an excellent API will let loyal users improve a social media website through their creativity. Restrictive policies can prevent the growth of third party development communities and diminish the success of the website.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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Compliance with Privacy Policy Essential for API Use

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Compliance with the privacy policy of the API licensor is an important term and condition of using the API. If the licensor is bound by privacy rules and is not allowed to retain private data, then the licensee should be prohibited from retaining data as well. Twitter is a good example. According to the Terms of Use, a developer cannot retain and republish deleted Tweets. Twitter recently shut down “Politwoops”, an account run by a not for profit organization dedicated to political transparency, because the retention and republishing of deleted tweets violated the developer (API) agreement.

In addition to privacy and data retention restrictions, the article discusses data security – whether the developer is able to retain some data, how it will keep it secure and in compliance with the licensor’s data security policies. The article also stresses that it is important to understand the extent to which a licensee can distribute the API platform’s data. For example, using a platform API feed to display platform content in a window on a licensee’s own site, as opposed to cherry picking posts and republishing them, may or may not be authorized.

Finally, the article points out that it is important for the licensee to obtain consent from the platform’s end-users, because even if end-users gave consent to the API licensor to use the material they generate on the site, this consent may not extend to an API licensee.

Read the article here.

Take away:

  • Developers must understand and comply with the privacy and data use policies of the API licensor. Failure to do so may result in loss of access to the API, with the resulting removal of the app from the site.

 

–  –  –

This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

What you don't know can hurt you! Subscribe to stay informed.

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