Crowdfunding sites offer a popular and valuable funding alternative for early stage startups to gain speedy access to investment. One frequently overlooked factor is intellectual property, and this can leave some startups high and dry. A well known scenario is one where a startup finds it has disclosed proprietary information that makes its product unpatentable and vulnerable to copycat imitations.
Here are eight practical steps you can take to protect your brand and invention during your crowdfunding campaign, preferably with the assistance of a qualified attorney. Expert assistance will help you avoid unnecessary pitfalls and find a solution that fits your product, situation and business goals.
1. Know others’ assets
Before spending time and money developing a product or brand, do thorough patent and trademark checks. These will reduce the chances of receiving cease and desist letters from competitors who have already registered a relevant patent or mark.
2. Know your own assets
Once you have decided on your product and plan, clearly identify your potential assets and the IP underlying your brand, products, and value proposition.
3. Register your trademark
In the event of a successful campaign, your valuable brand name could potentially be taken by a competitor if your brand name is unprotected and they file for registration before you do. Take the necessary basic steps to protect your name and brand, such as registering your trademark in the appropriate classes and regions.
4. Understand requirements and risks for patentability in your region
Understand the filing process and timeframe to ensure timely patent applications. Also note that in many jurisdictions any prior disclosure of your idea may count as prior art and make your idea unpatentable. While the US and Canada offer grace periods, such as a 1-year timeframe for registering a patent after disclosure of your invention, there may be associated risks in relying on these as part of your short-term IP strategy. Ensure that you fully understand the requirements in your region or markets.
5. Have the right agreements in place
Before disclosing any details to third parties, including co-founders, employees and advisors, ensure you have the right agreements in place. Confidentiality agreements are not a guarantee that your idea will remain secret, but they may provide you with some recourse if your idea is leaked or stolen.
6. Restrict certain information as a trade secret
Depending upon your individual product, you may restrict the information relating to patentability as far as possible as a trade secret. This can be tricky during a crowdfunding campaign when you need to persuade potential investors of the desirability and uniqueness of your product, but is perhaps one of the most effective ways to protect your IP rights.
7. Choose your crowdfunding platform carefully
Understand how much information you will be forced to disclose on the crowdfunding site you are using, as terms differ from site to site. You should also determine which duties and liabilities regarding infringement you might be subject to by using the website.
8. Consider a provisional Patent filing
Provisional patent filing may offer some measure of protection, including protection against defensive patents being filed by a competitor. Again, a qualified attorney will be able to give you the right advice for your situation.
Crowdfunding can give you fast access to investors and great marketing exposure but these benefits have to be balanced against the risks to your intellectual property. Taking the above steps with the assistance of a qualified attorney can help you raise vital funding without impacting your IP rights.