A recent app dispute between the Globe and Mail newspaper, and Spreed Inc., a Toronto-based app developer, highlights the risks with outsourcing app development, for both companies and developers.  Spreed developed an iPhone app news reader for the Globe, which was popular enough to pull in 700,000 readers. For whatever reason, the Globe later decided to develop its own app inhouse.

When the Globe’s inhouse app was launched, Spreed issued a software update to the users of Spreed’s Globe and Mail app. Updates provide bug fixes, upgrades to a new iOS, or new functionality – at least that’s what users expect. However, in this case, the update peeled off the Globe and Mail user-interface, and transformed the app into something new called “Free Press News” – a generic news reader no longer associated with the Globe and Mail.  Why can Spreed do this? Because, according to them, they own the code.  Lessons for business?

• Get advice. If you’ve hired an independent app developer, then check your contract: who owns the code? This becomes critical when the relationship breaks down – in this case between the content-provider and the app developer.
• App ownership is important in other situations including: privacy (who has access to what information during and after the contract?), and transfer of IP rights (let’s say you sell your company and want to transfer all the intellectual property – including your popular iPhone or Blackberry app. You can’t transfer the code if you don’t own it).

Calgary – 07:00 MDT