If you're exploring the idea of crowdfunding to raise capital for your venture, it means you have - or think you have - an original idea. Whether it is product, service or technology related, before you proceed further, you will want to ensure two things:
- That you aren't unwittingly copying someone else's idea, and
- That others can't easily copy your idea
Research the Field
Do your due diligence to make sure someone else hasn't come up with the idea before you. If you fail to take this step, you may get more than you bargained for from the crowd in the form of a lawsuit. In addition to capital raising, crowdfunding has also led to a proliferation of lawsuits alleging infringement of third party intellectual property rights. Conduct a patent search for previous patents, review publications and articles, and look for any evidence that you may be infringing on someone else's intellectual property rights.
Protecting Your Idea
First-mover advantage is easy to squander. If you go public too soon, someone with more capital and an existing organizational machine could eclipse your first-mover advantage and take your unprotected idea out from under you. Three things to look into before you launch a crowdfunding campaign:
- Assess whether you need to protect your idea, and engage the help of a patent or IP attorney if necessary
- If protection is advised, have either a utility patent application or provisional patent application prepared
- Make sure you understand public disclosure rules, and
- Require signed non-disclosure agreements before you discuss anything related to your idea prior to the crowdfunding launch
Patent Rules to Note
Rules under the America Invents Act changed in early 2013. The system is now a “first-inventor-to-file” system, where prior to 2013 it was a “first-to-invent” system. Public disclosure about an invention or idea starts the clock and inventors have one year to file a patent application. Miss this deadline and you risk losing patent rights. Public disclosure can be difficult, too, as even discussing your idea with a crowdfunding platform, without a non-disclosure agreement, could be considered public disclosure and render you ineligible to patent.
So, unless your strategy is specifically to proceed without patent protection, do your homework today to avoid unpleasant surprises tomorrow.
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