Kickstarter is a US based company which provides an online tool to raise funds for projects/products via a crowd funding model. Kickstarter have recently announced a formal launch of Australian and New Zealand projects. Below, we take a look at one potential problem in launching on kickstarter too early.
The kickstarter model (like most crowd-funding models) works by users pledging support financial support for a project over a predetermined time period. If the target amount for the project is reached within the time period, the funds are taken from the pledgers and put into the project (and kickstarter takes a commission). If the project fails to reach its target, the pledgers are not charged (nor is the person who organised the project). Kickstarter is one of many crowd funding sites and is one of the most popular platforms for crowd funding.
As of 14 October Australian and New Zealand projects can be created. From 13 November projects will be able to be launched. Details of the launch may be found here.
Kickstarter and Intellectual Property
While the launch of Kickstarter in Australia and New Zealand is a positive thing for small to medium enterprises and start-ups, this launch date will strike fear into the hearts of patent attorneys and intellectual property lawyers since it is likely that a large number of kickstarters will inadvertently weaken or destroy their intellectual property position.
The main problem with publicly disclosing your project is that it may jeopardize your patent and design rights in the product (i.e. your ability to obtain a design or patent). Worse still, because the product has been publicly disclosed, and you cannot now protect your intellectual property – others will be free to copy your product and you will not be able to take any action to stop them.
Designs
Many of the projects currently listed on Kickstarter relate to products which have an appearance or design feature (i.e. the way it looks). In Australia (and many countries) public disclosure of a design prior to filing for a design registration will invalidate that design. It is important particularly for designs that you seek intellectual property advice (and take steps for protection) prior to publicly disclosing the designs (i.e. prior to launch on Kickstarter).
Patents
Patents protect inventions (generally, functionality or “the way things work”) and like designs it is possible that the disclosure of a product may be considered to be public disclosure of the invention which you may later wish to file a patent application for. In many countries public disclosure of an invention prior to filing is fatal to the patent application. However in Australia and the US (for example) a grace period of 12 months may be relied upon. Importantly, this is not the case in other jurisdictions such as Europe.
Summary
While Kickstarter and other crowd funding models are an excellent way for small and medium sized companies to obtain capital for their projects it is critical that you get professional advice in relation to Intellectual Property before public launch of the project since in many cases leaving it too late will either weaken your intellectual property position or destroy it all together.
Mark Williams and Mark Wickham will be in the audience at the Kickstarter School Melbourne on 27 October – feel free to come up and say hello.
Phillips Ormonde Fitzpatrick will be running an upcoming seminar on IP issues and Crowd Funding. To express your interest in attending, please contact Mark Williams.
If you have any issues in regard to launching a product on Kickstarter or any other intellectual property issues please do not hesitate to contact us for a free consultation.