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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.

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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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