Contract LawSoftware

API is red hot right now (and an API is like the doors of a house)

API

API is red hot right now

Application Programming Interfaces (APIs) are red hot right now and like the doors of a house. If you don’t understand what I am talking about don’t worry. APIs often sit in the background of apps and software you use everyday unnoticed. Although it is a new technology, APIs are the future today. Check out the API Evangelists who take to online forums to worship and advocate the benefits of APIs like itinerant preachers with an almost religious fervour . APIs recently hit the news headlines when hackers used an altered API to steal Snapchat images from a third-party web app. Incidents like serve as a reminder for businesses to have robust licence terms in place to govern how users and developers use their API and access their data.

What is an API?

Essentially, an API allows one computer program to interact and communicate with another computer program. APIs are programmed based on rules and protocols built in to the API that the developer must follow. From a practical perspective, APIs provide customers or developers with a way to access or use a business’ products or services. The benefit of APIs for developers is that they are adaptable and can be used in a number of different ways by programmers.

APIs are like the doors of a house

So why are APIs like the door of a house? Computer World provided a succinct metaphor for APIs likening them to the doors of a house. In the article Josh Walker, an analyst at Forrester Research Inc. says that building an application with no APIs is analogous to building a house with no doors. The API for all computing purposes is how you open the blinds and the doors and exchange information.

How Google, Twitter and Facebook use APIs

Companies like Google, Twitter  and Facebook  use APIs as part their product distribution model. Customers or developers can use APIs to access data and functionality from these companies in stand-alone apps or webpages. For example, the Google Maps APIs lets developers embed Google Maps in their web pages or mobile apps.

Commercialising technology with APIs

A properly deployed API, coupled with a sophisticated marketing strategy, can have great commercial potential for your business. Does your business have proprietary technology or a particular database of information that you want to interact with other applications? If so, you can use an API to distribute and commercialise your data in wholesale or retail markets by allowing customers to access and retrieve your data as they require. If your business decides to use an API, the market will be able come to your business in a variety of ways through your API. This approach can be thought of as a self-service model as opposed to the traditional model of requiring traffic to come directly via your website.

Software license agreement

I have recently assisted a number of clients to draft a software license agreement to licence their API solutions as part of their broader online commercialisation strategy. The scope of your business’ licence will depend on the nature and complexity of your business model and the type of products and services you will provide. At minimum, you will have to provide an online customer licence. You may also need to provide a developer licence and secure access keys. Some key legal issues that you and your legal adviser will need to consider include:

  • type of licence, licence restrictions and acceptable use obligations
  • permitted use of your business’ branding and trade marks in the user interface
  • allocation and flow-through of risk between third party providers (such as API managers and cloud hosting providers), your customers and you
  • managing your privacy and data protection obligations if you or your third party providers collect user information through the API
  • will you offer any support, availability targets or other service levels in respect of the API
  • will you provide any documentation with your API (the licence terms should also apply to that documentation)

Please contact me if you have any questions or queries about licensing your company’s API.

Further reading about APIs

There are hundreds of resources and websites dedicated to APIs. One of the best is here and it is called ‘Winning in the API economy’. I thoroughly recommend it as essential reading for all businesses with an online presence.*

*Note: I am not affiliated with, and do not receive payment for recommending, Apievangelist.com or any of its content.

 

Photo credit: Pixabay

5 thoughts on “API is red hot right now (and an API is like the doors of a house)

    1. Hi Rosemary, that’s a really good question. While they will both be commercial contracts and have similar provisions regarding the need for software to interface correctly with other software, the subject matter and purpose is different. An API is easiest to think of as a set of rules that allows two computer programs to transfer information to each other. Contractually, it will usually be in the form of a license to API developers. On the other hand, I think you are talking about a system integration agreement. An example of this is where a systems integrator installs and configures a software or hardware package and ensures the customer’s software, hardware and systems continue to interface correctly.

Leave a Reply