The iPhone App store has been open for almost a year now, and while many of the apps provide substantial utility, most are just plain and simple fun. Game development for the iPhone is a rapidly growing industry. Below I'll cover some of the general problems that may and have come up in iPhone App development. If you are unfamiliar with iPhone App development, follow the jump for some quick pointers on getting started. If you're already a Mac user and want to develop for the iPhone, you should head over to the Apple Developer Connection to learn about the technical and procedural requirements for iPhone app development. Bear in mind that all apps are subject to Apple certification before they can be tested on an iPhone or uploaded to the iPhone App store.
Intellectual Property and Related Issues
1)App games based on PC/Console games. Many developers may want to create iPhone versions of their favorite PC, Console, or handheld games. However the creation of an iPhone app based on someone else's work may be considered a derivative work or reproduction of the original game under copyright law. Therefore recreation of the original game or even an app loosely based off an original game, no matter how novel in execution, would almost certainly expose the developer to infringement liability. Even ignoring the copyright issue there are legal claims under trademark and unfair competition that would create major problems for our would-be developer. Absent a license from the original game developer/publisher no iPhone App developer should attempt to create an app based on prior games.
2) App games based on or resembling existing iPhone apps or other games. Due to the simplicity of various iPhone Apps, it may often be the case that some apps closely resemble other apps. This can be a tricky problem—while under copyright law two authors may create identical or similar works provided one did not take or borrow from the other, the same is not necessarily true under trademark law. Furthermore, proving that you did not have "access" to someone's pre-existing app usually requires a lawsuit. While Apple reviews each application and provides certification, the reviewers are not omnipotent and may not be aware that pre-existing apps exist. Under the SDK agreement is the developer's obligation to ensure that no copyright or IP laws are being violated. The only real option is to tread carefully and check out the competition or, if you can afford it, obtain Errors & Omissions Insurance for your company/application.
3) App games that use the name and likeness of celebrities. This has actually happened on more than one occasion. Using the name and likeness of a public figure/celebrity may expose you to liability under state name and likeness laws or trademark/unfair competition law. What you consider parody may be considered defamation by the individual in question or worse, a judge. Unless you want to argue your case for parody and fair use in court, your best bet is to avoid potential exposure by using your own fictional characters.
** Addendum: Trademark matters. As pointed out by Dan Rosenthal over at GamesLaw, one issue that deserves mentioning is the trademark problem– frequently iPhone apps will contain deceptive names that closely resemble the trademarks of other products or similar services. Absent a license or permission from the trademark holder, developing an app using someone else's service or trademark can and in all likelihood will expose you to some legal liability. This is particularly true if your game also uses other IP elements. See the iBorat app for a good example of the kind of use I mean.
Contract and Related Issues
1) User privacy. Under the SDK Agreement developers are required to comply with "all applicable privacy and data collection laws". This includes state, federal, and international laws. Privacy laws prevent the dissemination of user data and information to third parties. If your program uses user location, identity, or other data, it is necessary to review the laws that may apply to your application. In some cases it will be necessary to inform users prior to purchase of the use of their information in connection with the app.
2) Use of Music. It should go without saying that any music used in your game needs to be licensed to you or owned by you. Normally I would have stuck this in the IP section, but the SDK agreement makes a specific provision for this.
3) Use of Open Source Software. Any use of open source software requires compliance with open source licenses. The SDK Agreement takes an additional step by requiring that the use does not in any way contaminate the SDK code. There is an argument that this additional language is superfluous, but to be safe you should review the license for any open source code to ensure that it is covered by an approved open source licenses (GPL, BDL, etc).
4) Rejection of your App. Apple reserves the right to reject your application for the app store. The reason may be based on non-compliance with the SDK or other developer agreements, or because the application does not otherwise comply with marketplace demand. It may even be based on your app competing with other Apple products.
For more strange contract policies that upset some users, follow the jump.