blog

Do You Need a Patent for Kickstarter? (Step-by-Step Guide)

November 3, 2021

Every day, new startups come up with innovative ideas that they hope will become the next big thing. Internet-based crowdfunding has enabled inventors and startups to efficiently market and finances their inventions through online crowdfunding platforms like kickstarter.com. These platforms have revolutionized how inventors and startups market and finance their business plans. However, entrepreneurs who use these platforms may be unable to protect their new ideas by disclosing their inventions before filing for patent protection. Therefore, startups seeking funding should plan well to avoid losing their valuable patent rights.

https://houston.innovationmap.com/3-tips-for-a-successful-crowdfunding-campaign-2621880563.html

What’s Kickstarter?

Kickstarter is a crowdfunding platform that supports creative projects. You can fund everything from music, film, and games to art, design, and technology. There are many creative, imaginative, and ambitious projects on Kickstarter that can be brought to life with the support of others.

Kickstarter funding is all or none. Failure to meet the funding goal can result in it being canceled, and no one will be charged for any pledges. Thus, creators will always have the planned budget before moving forward. Each project creator determines the funding goal and deadline. People who relish the project can pledge money to help make it happen. All backers’ credit cards will be charged when the project reaches its funding goal. Again, it is either all or nothing. No one is responsible if the project fails to reach its funding goal.

https://insights.dice.com/2013/03/26/has-kickstarter-peaked-2/

How does a Kickstarter make money?

Kickstarter takes 5% of all the money raised on the site. This money is used to profit, which pays for advertising and employee payments. However, Kickstarter users who raise money through Kickstarter make extra profits.

If you are looking to get funding, find a group of people who will donate to your project. Then promise them a reward or incentive. Backers may be rewarded with interest, a percentage of their company, or free products. The group or creative person will determine the amount required to fund the idea and then wait for backers to meet that quota.

What are the Pros of Kickstarter?

  1. People love to support a winner. It doesn’t take long for them to desire to unlock the potential of a Kickstarter project. It is believed that 9 out 10 campaigns that reach 25% funding will meet or exceed their goal. Although the numbers are not official, it is an estimate. Creators and supporters should work together to achieve their goals.
  2. You can get a lot of attention with your campaign for nothing. Many tech magazines, online publications, and individuals regularly check Kickstarter to see which new campaigns are active. If they are innovative and quirky, it can get a lot more press. This can help to grow a brand, even if the crowdfunding campaign is unsuccessful.
  3. The timeframes for fundraising are very short. A campaign can only run for 90 days on Kickstarter. This means that you don’t need to worry about your fundraising efforts being extended for indefinite periods. It would be best to meet deadlines and use these to your advantage, especially when you are close to reaching your fundraising goal and need some extra support.
  4. You can keep it free until you reach your goal. If your Kickstarter project doesn’t reach its full funding, the only costs you will face are incurred internally to market and create the campaign. There are no upfront fees to join this platform.
  5. You cannot transfer ownership of your product, idea, or service. Kickstarter doesn’t take any equity shares of your campaign in the commission process. All creators can keep 100% of their own when representing their work.

What are the cons of Kickstarter?

  1. It is a one-size fits all format. You must reach your Kickstarter funding goal if you wish to receive your crowdfunding cash. If your goal is not met, you will not receive any pledges.
  2. Successful campaigns have to pay a fee. Kickstarter will receive 5% of any cash raised to be able crowdfund on the site.
  3. It is not possible to pledge for your own project. To supplement Kickstarter campaigns, many companies hold fundraising events. These events could include silent auctions, raffles, and door-to-door fundraising. Because businesses cannot pledge funds to these campaigns, the money raised through these efforts can’t be added to the campaign online. This means that community fundraising for Kickstarter must encourage people to donate online rather than in person.
  4. It is easy to forget that people have pledged money. Some Kickstarter supporters may forget to authorize a pledge due to the length of a crowdfunding campaign. They may not realize that the charges have been charged to their credit or debit card until they receive them. Sometimes, this can make it difficult to access all the cash that was pledged immediately.
  5. Crowdfunding does not create an actual market. While Kickstarter has taken steps to remove scam campaigns from their platform, they cannot guarantee that any backed campaign will offer a funding-level product. Although it is often referred to as an online shop, it only allows an average person willing to invest in a brand, company or idea at its early stages. Failure can ruin every other campaign and drive potential investors away.

What are the benefits of supporting projects on Kickstarter?

Backers can give reasons to pledge money and maybe rally behind their friends’ projects. A new idea inspires many people. Finally, some are inspired by the rewards of a project — a copy or limited edition, a customized experience, or an original version.

The project creators retain 100% ownership over their work. Kickstarter cannot be used for financial returns, equity, or loans solicitation. While some projects funded through Kickstarter might make money, backers support projects to bring them to life, not for financial profit. Kickstarter backers get a glimpse into the creative process and can help bring that project to life. The project creator offers a range of rewards that they can choose. The rewards offered by project creators vary, but they often include a copy (CD, DVD, or book). Or an exclusive experience. Backers may also pledge to support a project without choosing a reward.

Do You Need a Patent For Kickstarter?

It is crucial to protect intellectual property before disclosing any part of your invention publically via Kickstarter. This involves filing a provisional US patent application for a new invention. Then, you will need to file patent applications in the countries in which you intend to sell the invention. Your invention must be patentable to obtain a US patent. It must also be novel, useful, inventive, or not obvious.

Once you have determined your invention is patentable, you need to ensure you don’t lose patent protection. This means disclosing the invention to the public before you file, or at least one year before filing in the United States and Canada. The countries provide these grace periods. You should disclose the invention to anyone interested in filing a patent application. Grace periods aside, it is possible that your competitor will develop a similar product and file a patent application before you. Canada and the United States have a first-to-file system. This means that even if you are the inventor of your product, you won’t be eligible for a patent. Any disclosure made before filing can disqualify you entirely from a patent in some countries. Therefore, it is essential to file a patent request before beginning the crowdfunding process.

If inventors are on a tight budget or making modifications to their invention, they may apply for a provisional patent application in the United States. This preliminary, incomplete application seeks to secure a filing date. It may be used later in a priority claim in regular patent applications. The description of how to use and make the invention can be added or changed from that initially submitted in the provisional application. All the subject matter in the provisional application is protected by priority claims filed on the original submission date. Not only will it protect your patent eligibility, but you may also discourage competitors from selling or copying your product. If your invention is copied and your patent is granted, you could be eligible for compensation. In addition, you risk losing sales to other competitors who can quickly copy and market your product without patent protection.

Startups at Risk from Patent Infringement Using Kickstarter

The patentability of an invention requires that it be original, inventive, non-obvious, and practical. From a crowdfunding perspective, the challenge and risk are that many crowdfunding platforms require specific details about the product. If these details are not provided, the technical invention could be “disclosed” and “published,” making it ineligible for patent. Therefore, it is crucial to file your first patent application before the publication of the campaign to protect patentability. It is also essential to verify the patentability of your invention(s) before you publish the campaign.

What to know before you start a Kickstarter Campaign?

View the Terms and Conditions to access crowdfunding sources. They will most likely not protect your intellectual property. However, it is essential to know that revealing a project will have unavoidable consequences. IP predators are constantly scanning these platforms.

Protecting Your Patent Rights

The patent application should be filed within 12 months after the public release of your idea in the United States. It is essential to remember that the 12 month period begins when you start a Kickstarter campaign. These 12 months should not be considered guaranteed as the United States has a “First-to-File” system that allows only the first person to file and not the original creator to receive the patent rights. A temporary provisional patent is available to a startup that does not have the funds to file a patent application. This allows the project to be “patent pending” while the funds are available. Provisional patents can be used for as long as one year and are less formal than a complete patent.

Kickstarter is not the same as revealing enough information to allow others to duplicate your campaign. A provisional patent should be obtained before any foreign crowdfunding efforts are made. Failure to comply with this requirement can lead to a startup being unable to file for patent protection in several European and Asian countries. International marketing and sales efforts should include filing for foreign patent protection to prevent your idea from being copied overseas.

Losing control of your Idea

Non-disclosure agreements, used in traditional investing in protecting new ventures, are commonly used. Unfortunately, these agreements are usually not possible in crowdfunding. This increases the risk of stolen ideas that companies can steal with funding if they are not protected.

It is paramount not to disclose too much information. You should also remove any trade secrets from project information. Also, be aware that user suggestions might not be just friendly advice. A comment is considered “intellectual property” and cannot be used without permission. The patent can be invalidated if it is not provided to everyone with a claim on the project. A lawyer is recommended if a comment contains a precious idea.

Losing your Brand

Although releasing project information via crowdfunding platforms such as Kickstarter is considered to be launching into the public domain, it can also pose a risk if a catch-name or trademark is used. The law states that only the first person to use a name or trademark is right. It is up to the interpretation of whether this includes crowdfunding. It is best to register your trademark before you launch a campaign to reduce the chance of someone else getting trademark protection. A trademark must also be registered in foreign countries, like the patent process.

Conclusion

Kickstarter can be an excellent way for investors to meet potential customers and help with an invention’s commercialization process at early stages. Kickstarter is a powerful marketing tool and helps you get your product to market quickly without incurring significant debt. However, because crowdfunding is complex, there are many intellectual property pitfalls that inventors need to know. Nevertheless, you can reap the benefits of crowdfunding while still owning your invention by carefully reviewing it, filing all necessary applications for intellectual property rights, such as patents, and understanding the terms and conditions of engagement with the crowdfunding platform.