App Happy: The Rise of a New Technological Industry and Why Intellectual Property May Have Very Little To Do With It
With over one million mobile applications available to download on smartphones, generating over one billion dollars in revenues, it is clear that the field of mobile application development is currently a hotbed of technological innovation. The United States grounds its innovation policy in the intellectual property clause in the Constitution, where it grants Congress the power to “To promote the progress of Science and the Useful Arts, be securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” While the goal of the intellectual property law is to incentivize innovation, the traditional utilitarian tale of the goals of intellectual property law falls short of telling the full story of the explosive development of the mobile application industry.
Mobile applications are a relatively nascent phenomenon, dating back just a few years to 2008. One study showed that over one billion people were using apps by the end of 2012, and predicted that number to grow to over four billion users by 2017. As these numbers reveal, apps are not just being consumed by a small subset of technologically savvy society, but rather they are being consumed on a rapidly expanding global scale. Apps are proliferating at a rapid rate, and while it is a revenue-generating industry, the top 25 app publishers account for most of that revenue. This means that the typical small developer that comes to mind is unlikely to be making much money. In an environment in which it is predicted that less than 1% of consumer mobile apps will be considered financial successes by their developers by 2018, one wonders why so many developers are developing so many apps.
There are a host of intellectual property rights potentially available for an app, yet intellectual property law does not seem to be playing much of a role in this large- scale innovation. patent moves too slowly and is too costly for most small developers. Copyright does not protect much more than the app’s literal software code and its total concept and feel. Notably, developers cannot copyright an idea, which is often the heart of an app. Apps can use trademarks to protect themselves against copycats that may mislead users. Short of actual piracy, of which there have been few cases, intellectual property will not provide much protection for apps. While intellectual property may help appropriate revenue, it seems pretty clear that it is not what is primarily incentivizing app developers to create.
Melissa Goldstein is a J.D. candidate, ’15, at the NYU School of Law.
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