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Addressing Intellectual Property Protection Issues Around Crowdfunding
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Addressing Intellectual Property Protection Issues Around Crowdfunding

Crowdfunding has proven to be an effective method of financing everything from high-tech gadgets and music albums to art and community projects.

Many entrepreneurs concerned about the lack of intellectual property (IP) protections, however, are still wary of crowdfunding their ideas.

Their apprehension is understandable. Crowdfunding is typically a way to finance early-stage projects and products that may not yet have the appropriate IP safeguards in place. Many innovative and interesting projects are left off crowdfunding sites, which hurts entrepreneurs and platforms alike.

Some platforms are currently thinking of how to address this, and there are ways to provide IP protections via methods like provisional patent applications. But these solutions are only appropriate for certain products and cannot be applied across the board.

One non-profit thinking about IP protections for the digital age is the U.K.-based Creative Barcode. Maxine Horn, an open innovation pioneer, launched the organization in 2010 with the goal of taking “the time, cost, and complexity out of early-stage IP protection and disclosure.”

Essentially, Horn told, Creative Barcode allows individuals to have safe conversations about novel ideas and concepts, and acts as a deterrent for IP theft.

The process works like this: Organizations or individuals download the Creative Barcode app, which enables them to create unique barcodes (QR codes) that they place on their content. This indicator shows information about the content, including the owner's name, contact information, date of creation, and use permissions. The app also allows creatives to send their concepts or ideas to third parties in a secure manner.

When a document is sent through Creative Barcode’s file transfer system, the receiving party must agree to terms of the Creative Barcode trust charter in order to view the content. Those responsible for the content must also adhere to the charter, which ensures that they are the legal owners of the content they display.

There are three kinds of barcodes that a creative can make, two for completed works ('free use' and 'rights reserved'), and one for concepts ('safe-disclosure'). Free use is self-explanatory, and rights reserved requires individuals to credit or pay the creators for using the content. These barcodes are unique to a specific object or piece of content, and can be applied to digital or physical iterations.

The safe-disclosure barcode for conceptual works protects creatives’ and entrepreneurs’ core ideas. Because a safe-disclosure barcode protects future iterations of an idea or concept, “the earlier you use it, the better,” Horn explained.

“What you’re doing is creating an innovation journey,” she continued. “If there was ever a breach, your barcode applies to all iterations throughout all disclosures, which is visible throughout. If the other party trying to defend a breach said, ‘Oh yeah, well, we have the same idea, and we developed it on our own,’ they would equally have to have the innovation journey. Innovation doesn’t just pop out.”

In two and a half years of operation, Horn said nobody has breached the trust charter, which is supported by the World Intellectual Property Organization (WIPO). Removing a barcode is illegal (as is removing any kind of identifier: “You can’t remove an ISBN number off a book and re-sell it,” Horn explained), and any breach would be reviewed by the WIPO.

These protections make campaign owners more secure when sharing their ideas with the public. But crowdfunding (as well as crowdsourcing and open innovation) platforms can also use Creative Barcode to their benefit, Horn believes. The key advantage for platforms is that campaign owners who place a barcode on the campaign page are “taking legal responsibility that it is their work.” Horn says the platforms GeniusCrowds, McGarryGadgets, and Ahhha all recommend their users to protect their IP with Creative Barcode.

Though crowdfunding platforms have not yet run into many legal troubles for their users’ projects, Kickstarter was named in a patent infringement suit brought on by a 3D printing company late last year. (Horn offered her perspective on the lawsuit here.) With crowdfunding maturing as an industry, lawsuits may become a more common growing pain.

Ultimately, Horn believes, Creative Barcode ensures two things: “creators [know] their ideas aren’t being stolen, and the recipient party [knows] the work uploaded does legally belong to the person disclosing it.”

“We’re trying to make it easier for people to understand what is free to use and what requires permission, and how to gain that permission quickly and easily,” she explained.

In a world where ideas can be shared, copied, and stolen in a moment’s notice, that sort of understanding can go a long way.

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