Crowdfunding has quickly become a viable way to fund new products and launch new businesses. Sites like Kickstarter, Indiegogo, and others have generated lots of enthusiasm around crowd funding and have helped to launch creative and exciting new products and businesses. Several Richards Patent Law clients have launched their businesses and products around successful crowdfunding campaigns, including:
Crowdfunding campaigns are an excellent opportunity for entrepreneurs to get direct market feedback on their product concepts from their potential customers while simultaneously raising capital to assist in bringing the product to market. It is a way for the customers to support startup companies’ products and a way for entrepreneurs to minimize their capital risk as they prepare for a product launch.
However, there are risks involved in launching a crowdfunding campaign, particularly when you are launching an innovative product. Posting the campaign publicly discloses the product and its name, which can lead to both patent and trademark issues.
On the patent side, public disclosure starts a one-year clock for filing a patent application in the US. If you don’t file a patent application for the invention within one year of its first public disclosure, you have dedicated the invention to the public and can no longer patent it. In addition, since the U.S. is a first-to-file patent system, many entrepreneurs want to file their patent application before they make the invention public and put the product idea into other people’s heads. Many clients choose to file a provisional utility patent application prior to launching their crowdfunding campaign. Filing a provisional patent application can be a low cost option for setting a priority date for the patent application and buying one year to decide whether to continue to move forward with the patent process.
On the trademark side, use of a name in a crowdfunding campaign can lead to potential trademark infringement issues. If you have not properly vetted the name and logo you are using prior to launching your crowdfunding campaign, you may receive a cease and desist letter from a trademark owner who believes his or her rights are being infringed. This is exactly the wrong way to start a campaign in which publicity is critical to the success of the project and in which a name change mid-stream can be devastating.
Richards Patent Law works with clients to protect their rights and minimize their legal risks. We can help you determine what may be patentable about your product and help you to secure those rights before launching your crowdfunding campaign. We can help you identify risks in the names and logos you intend to use.