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Selling a Mobile App? You May Need to Sign a New York Non-Compete


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1/1/2016
Jonathan Cooper
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Are you an IT developer hoping to strike it rich in the world of mobile apps? If so, you should consult a New York non-compete attorney before signing any documents relating to the sale of an app. Mobile apps are Internet applications that also run on smartphones and other mobile devices. In recent years, the affordability and accessibility of these devices has resulted in an explosion in the number of users, both in the business and consumer arenas. As a result, developers are capitalizing on the increased use by creating mobile apps, such as the popular apps Instagram and OMGPOP.

In order to make it easier for developers to sell their apps, a new marketplace called Apptopia was recently launched that allows developers to sell their apps to prospective buyers. The service is taking off, with 120,000 apps uploaded and over 500 users since its opening.

The apps are sold through an auction, with Apptopia receiving a fee of 15 percent of the sales price. Purchasers of the applications receive the source code, IP, customer list, data, and revenue related to the app.

While this may seem like a great option for smaller developers lacking the resources to fully promote or improve their apps, there is a caveat of which the seller should be aware. As part of the deal, the developer of the app must sign a non-compete agreement with the buyer. Depending on the terms contained within each individual non-compete, the seller may be forced to agree to any of the following:
  • Not to provide services, directly or indirectly, to any person or entity within a specified geographic area.
  • Not to provide services, directly or indirectly, to any person or entity who is currently a customer of the buyer or user of the app.
  • Not to solicit, directly or indirectly, any person or entity who is currently a customer of the buyer or user of the app.
  • Not to advertise or promote competing products.

Therefore, it is vital that an experienced legal professional review any New York non-compete agreement before the sale of the app.

For more information about non-compete agreements, contact a New York non-compete agreement lawyer at (888) 497-3410.


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