Venture capitalists move over. CNN Money reports that inventor Eric Migicovsky raised over $7.8 Million through the crowdfunding website Kickstarter, obliterating the previous Kickstarter fundraising record of $3.3 million. According to the article, three weeks ago Migicovsky launched a fundraising campaign touting a prototype for a watch that syncs with iPhone and Android technology -- the
Pebble watch. Within hours he had reached his initial $100,000 funding goal. As of the release of this post, Migicovsky had raised $7,960,950 from 53,430 backers with 16 days still to go in his Kickstarter campaign.
Crowdfunding is an increasingly popular alternative to venture capital and other traditional avenues of investment. However, before posting a prototype or invention on a crowdfunding website -- where millions of people can view it 24 hours-a-day -- it is critical to maximize intellectual property protection or risk permanently losing rights.
One way to protect intellectual property is to file a provisional patent application before disclosing it to the public. A provisional patent application gives the applicant one year to commercialize or exploit the invention before filing the non-provisional patent application. During this time, the applicant can use the "patent pending" label which can have a considerable deterrent effect on potential competitors and prevent copying or stealing. However, do not miss the one-year deadline. Failure to file the non-provisional patent application within the one-year period will likely bar the applicant from obtaining patent protection.
Trade secrets, confidential information and other proprietary information should also be carefully considered prior to public disclosure through a crowdfunding campaign. Public disclosure or failure to take steps to adequately preserve trade secrets and confidential information could result in a permanent loss of rights. It should be carefully considered whether there is a way to present the invention without revealing trade secrets or confidential information.
We routinely advise inventors and companies with respect to new products. In our experience, no two products are the same and there are unique intellectual property rights to consider relative to each specific invention. We strongly recommend carefully considering all of the rights associated with a product or invention before releasing it to the public.