Crowdfunding Advice: Identifying Intellectual Property is Only Step One

This is a guest blog by Mary Juetten, founder & CEO of  Traklight, a Phoenix-based software company that provides cost-effective, online IP identification tools and resources that enable inventors, creators, entrepreneurs and small businesses to identify and protect their IP. Mary speaks, consults, and mentors start-ups in the areas of planning, business models, and IP identification and is active in US crowdfunding organizations CFPA and sits on the CFIRA Board.

Intellectual property Intellectual property (IP) needs to be identified before it can be protected but that is not where it stops for crowdfunding. Before launching a crowdfunding campaign or any financing presentation, do your research and look out for others’ IP. The last thing that you wish to do is labor over a campaign only to find you have accidentally infringed on someone else’s intellectual property. Also be sure to note that IP is more than just patents; in more instances than not, campaigns have “borrowed” items and violated copyright or trademark restrictions, effectively infringing on another’s intellectual property. There are three ways that this can happen:

Images
Images, videos, and music are common campaign elements. But do not assume that because a copyright “C,” or ©, is not displayed on an image, that is it fair game. You wouldn’t steal a bike just because it wasn’t locked up! Although copyright notices are not necessary, they are a very good idea and help indicate to others that you have rights to that content. Recently a crowdfunder fell victim to this situation, and received a letter with an eight thousand dollar fine for copyright violation. Raising that money was hard work and it was a shame they lost the money they raised for something that could have been avoided.

Music
Like photographers, musicians track the use of their work. A successful Kickstarter crowdfunder shared a story that he was contacted and thanked by the artist whose song he properly licensed for his campaign. The song cost the successful crowdfunder only about $100 – much less money than the fine that would have been incurred had the crowdfunder not asked proper permission to use the artist’s song.

Product
On the product side of things there is the risk of patent infringement. A 3D printer case had 3D Systems suing Form Labs (the crowdfunder) and the Kickstarter platform over patent infringement. This is the perfect example to show that, as the creator, you must make sure you have the proper permissions and/or licensing to use others’ technology or designs. Patent litigation is very expensive.

To sum it up, avoiding intellectual property infringement comes down to three simple actions: reading, reading, and, you guessed it, more reading! Ignorance is no defense – read the terms of use! Most sites have terms of use for their pictures, clips, or songs, and these terms must be read to determine if you can use the picture, where you can display it, and whether you are allowed to make money if the content is included in your campaign. For example, we licensed cool intellectual property cartoons for presentations and education only, the terms of which clearly state these images cannot appear on the Internet. This restriction is the result of choosing a lesser license amount for non-commercial use (note that crowdfunding for your company is most likely commercial use!). For a list of sites to visit to legitimately find music and pictures, visit our IP Cloud at www.traklight.com under Creative Resources.


  • Bill

    CrowdClan great post. These are many of the thing that a person or organization that is trying to run a crowdfunding campaign on their own may not think of have time to check out. This is why having a team or a consultant is vital.These are very important issues to take into consideration before proceeding with a crowdfunding campaign. Thanks for the guest post .Mary Juetten.

    • http://www.crowdclan.com/ CrowdClan

      Agreed Bill, the reason this blog was started was to help educate entrepreneurs on as many aspects of crowdfunding as possible.

      After doing our initial research we realized how many entrepreneurs went into their campaigns blind. The media has made it seem like crowdfunding is an easy alternative to raise capital.

      The success stories of people raising millions VIA Kickstarter are plastered everywhere. This gives a false sense of ease to entrepreneurs when it comes to crowdfunding.

      Unfortunately this is still the belief among many people, throw your idea on Kickstarter and watch the money roll in. They then hit the panic button when they have not received a penny within the first week of their campaign. This is why we highly recommend mentors to help guide people in the right direction and do much of the grunt work for them.

      My hope is that, our blog teaches people the basics and outlines the difficulties of running a successful crowdfunding campaign, partnered with having a professional mentor work on the project hand in hand with them.

      • Susanne Rossignol

        Thanks all. Any tips on the best way to research if you will run into copyright infringement? Do you need to pay a patent lawyer to do a search?

        • http://www.crowdclan.com/ CrowdClan

          Yes traditionally you would pay for a patent lawyer if you are funding a unique technology with proprietary elements.

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