IP Risks of Reward Crowdfunding – PART I: Patents
If you read the terms and conditions that govern your use of any crowdfunding platform, you will quickly discover that crowdfunding platforms do not offer any protection for your intellectual property. Therefore, public disclosure of your intellectual property on these platforms can have a significant impact on its legal status. It is also important to recognize that there are sophisticated IP predators constantly searching crowdfunding websites for unprotected ideas.
Therefore, before you launch a crowdfunding campaign on Kickstarter or other reward-based crowdfunding platform, it is essential that take steps to protect your company’s intellectual property (IP). In this series of posts, I will discuss the various IP risks posed by crowdfunding and how best to protect your ideas.
PART I – PROTECTING YOUR PATENT RIGHTS
In the U.S. and Canada, when an invention is disclosed to the public (in the case of the U.S., when the invention is disclosed in a printed publication anywhere or in public use or offered for sale in the United States), a patent application must be filed within twelve months of this date. Therefore, if you want to protect your idea it is important to realize that public disclosure of your idea on a crowdfunding platform may start the clock on the need for a U.S. patent filing.
Another consideration is that the U.S. is now a “First To File” system, which means that anyone can file for a patent on your idea without having to prove that they were the first to invent it. If you launch your crowdfunding campaign before filing your patent, you could find yourself in race with your campaign donors to reach the U.S. Patent Office.
Prior to any public disclosure, including publishing a crowdfunding proposal, you should consider filing a patent application to protect your rights. However, if you lack sufficient funds to have a formal patent application prepared, there is a way to protect your invention short of filing for a U.S. patent. A provisional patent application is a low cost way to make your invention “patent pending” for a full year while you are raising money. A U.S. provisional patent is an informal patent application that generally costs less to prepare and file than a regular patent. The U.S. provisional patent application must be replaced by a formal application in one year. It is during this one year period that the entrepreneur may try to raise sufficient funds through crowdfunding and other sources. If your project meets its goals, then you move on to the more formal “nonprovisional patent application”. If not, then you’ve saved quite a bit of money in legal fees.
Publishing a crowdfunding proposal will generally require providing some details about what your project will produce. However, if you disclose the actual invention, including sufficient details about your product so that a person skilled in the art would be able to re-create your invention, this could be considered public disclosure of your invention. This could bar you from you filing for patent protection in many countries, including several countries in Asia and Europe, where a patent application must be filed prior to public disclosure of the invention.
Therefore, putting your idea on a crowdfunding platform may itself preclude you from later filing for patent protection in those countries. If that is not your intention, then you will want to research the patent filing rules in every country where you intend to offer your product or invention for sale or consult with a patent attorney who is knowledgeable about international patents.
Remember that crowdfunding platforms expose your ideas to an international audience. Therefore if you intend to sell your product worldwide, remember that you must also file for foreign patent protection. Otherwise, you could find that knock-offs of your idea could appear in foreign markets before you even launch.
IP Risks of Reward Crowdfunding – PART II: Losing Control of Your Idea
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