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 .
- 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.
– – –
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.