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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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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.

 

–  –  –

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.

 

–  –  –

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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