Before You Crowdfund an Invention, Consider Patent Protection
Are you an inventor? Do you have an invention that works just as you expected?
It all starts with a crazy idea which you believe in so much that you put in the effort to bring it to life.
But the journey is never smooth. You will often get close to the working product only for a small hitch to take you several steps back.
If you have developed anything from scratch, either a physical product to a virtual one like a software product, you know this process.
So, when your eureka moment comes and everything works perfectly, you have a lot to celebrate.
And the next logical step is to get funding so you can develop your product in large scale and sell.
And where do you get funding from?
Easy. You crowdfund. Right?
Crowdfunding has gained a lot of popularity as startups seek to launch their business ideas despite having little cash.
The idea is to have many people, referred to as backers, contribute small amounts to reach the desired amount.
The ease and convenience of getting funding through crowdfunding platforms is unmatched.
Moreover, this funding avenue offers more than just funding opportunities.
Crowdfunding also provides some good benefits which are worth appreciating:
More Efficient Than Traditional Funding
One of the reasons crowdfunding is popular is the ease of access to backers.
Backers don’t necessarily need to value your idea as banks would, before getting on board with it. It therefore becomes easier to access funding than if you visited a bank for a loan.
In many cases, banks will require some form of security. Apart from that, the process is longer and tiresome.
And since banks will consider your financial status before lending you any money, you may not stand a chance if you’re not a transacting customer.
But what do backers require before giving you funds?
All you have to do is win them using your invention and allow them to be first in experiencing it.
Backers are people who love being ahead of others.
They want to have the most novel of products so they enjoy their value as well as stand out from the crowd.
This is why a platform like kickstarter has over 16.7 million backers.
Check out the below official statistics about the platform.
Where you have such a big number of people willing to buy a new product before others can, the opportunities are unlimited.
Also, launching your funding campaign on crowdfunding platforms is as easy as creating an online profile.
Running the whole campaign, depending on the product and the duration you specify, can be very short.
Indicator of Consumer Interest
Crowdfunding also gives you an opportunity to gather customer feedback before having any real customers. You can look at this as product validation.
If your invention is really cool and many people are eager to have it, then you know that your product is a success.
Going through the comments from backers and potential fans of your product, you’ll see how much the market needs your product.
There’s nothing as great for an entrepreneur as having the assurance that your product has a ready market.
If the crowdfunding population wants your product, then so will the normal market outside the platform.
Provides Cheap But Excellent Marketing
And with that assurance comes something else very critical for the “normal market.” That thing is marketing.
You can look at the crowdfunding platform as a different world from the one you live in. In the crowdfunding world, people are eager to get new stuff. But in the “real” world, the skeptics could outnumber the potential customers.
Furthermore, if you have no business experience or are little known, the chances of your business kicking off are slim.
Once the people in these platform go back to the “real” world of Facebook, Instagram, Snapchat etc, they will spread the news.
They will create lots of awareness and publicity about the new invention in town.
And if you have a website and social media pages, they can share links and help get the word out there.
This is what social media marketing is all about.
However, the beauty here is that you don’t labor so much. Just do the right campaign in the crowdfunding platform and so much more will follow.
But the benefits of crowdfunding do not in any way mean that there are no risks. In fact, the risks involved are big. These risks are the reason behind writing this article.
By the time you’re done reading, you’ll understand what to do to stay safe.
The information will help you avoid losing your invention to someone who never worked for it.
Here are two of the biggest risks you should be aware of.
The problem with crowdfunding is that the platforms are public in nature. And the public nature we’re talking about here is the internet.
That means that your fresh and unique ideas are basically visible to the whole world.
This was designed and intended to be good for you as an inventor. And indeed, the benefits are great.
The fact that you can get publicity from anywhere in the world increases your chances of hitting your funding target.
But it’s in that same benefit where the problem lies.
And the problem is made worse by the fact that you have to share lots of information about your invention to get funding.
The question is, how safe is the information you’re sharing?
Had you been having a discussion with an individual, you could easily get him to commit to secrecy.
But on the internet?
People from all over the world are looking for money.
And just as thieves want money they never worked for, so do some people want to run with ideas which were never theirs.
When you describe on the internet how a product works, it takes an expert in the field very little effort to make minor changes to the concept and make money with it.
This is the birth of a competition which you’re likely unaware of.
You go ahead to produce your product and find that someone has something which works better than your product.
“How come?” you ask.
Well, your idea was on the internet. Once on the internet, the safety of your invention is no longer guaranteed.
A worse case is where the actual invention, not just the concept, is stolen.
When this happens, the product which competes with you is a copycat, not a slightly different one. This is where everything is exactly like what you worked on in your private lab.
This situation can be very heartbreaking because not only is it daylight robbery, but you can’t even distinguish your product from the robber’s.
What’s worse is that you may not be able to do anything about it. You can lament, accuse, claim, threaten etc. But changing the situation altogether is extremely difficult.
That was the situation in which an Israeli inventor found himself in. His invention wasn’t “improved” upon. It was replicated exactly as he had invented it.
Yekutiel Sherman was sure he was going to become rich from exploiting the global selfie trend. Instead of relying on the traditional selfie stick, he designed a smartphone case which doubled as a selfie stick.
All you needed to do was pull back the “stick” from the back of the cover, adjust the phone position and voila!
But unknown to him, someone was keen on reaping where he had not sown. Just seven days into the kickstarter campaign, someone had stolen the invention, manufactured the product and was already selling it.
Seven days is all it took for Yekutiel’s invention to make someone else rich.
And that’s not all. Whereas the original product was to retail at $47.41, the copycat was on sale at $8.18. You can guess what the reaction of the backers was like when they got the news.
HOW TO PROTECT YOUR INVENTION
It’s always wise to learn from other people’s experiences. You don’t have to go through a similar situation so as to learn.
This article teaches you how to protect your invention through patenting.
Patenting is the only real protection you can have for your invention. The challenge however is that patenting is not easy.
First, it’s a process and second, it’s costly.
But does that mean that you should gamble and leave your invention vulnerable?
There are steps you can take to safeguard your hard work and ensure you benefit accordingly from its commercialization.
Here is what you should keep in mind as you seek to fund your invention.
Patent Before Revealing Your Invention
The safest way to protect your invention is by patenting it before you go to source for funds.
This is advisable whether you’re crowdfunding or looking for an angel investor or a venture capitalists.
When you apply for a patent, you won’t get the patent immediately. It will take some time before the United States Patent and Trademark Office clears your invention for patenting. However, in the course of that time, your invention is well protected.
As you go for patenting, it’s important that you understand that there are different protections that you can benefit from.
Apart from protecting the invention itself, you can also protect your trademark and have copyrights for any written material used specifically to market your product.
The below video from the USPTO explains the differences between a patent, trademark and copyrights.
Having done this, you can safely go ahead and describe your invention as required by backers.
In fact, you can even say that your invention is already patented. That statement in itself will be a deterrent.
In the event that someone steals your idea or the invention, you can take legal action against him.
Patent Within One Year of Revealing Your Invention
In case you have already exposed your unique solution to the whole world without patenting, you can still do it.
Normally, you are allowed by the law to apply for a patent within one year of disclosing your invention to the public. You should be relieved to know that all hope is not lost.
However, you need to move quickly. If someone else beats you to that application, you might have difficulties getting the patent for yourself.
It can be frustrating for you to start the process only to discover that someone else did it before you.
At this point, you will have to prove ownership.
Simply mentioning your crowdfunding campaign as evidence that you are the owner of the invention may not suffice in a court of law.
Of course you can argue out your case logically.
But will you be able to prove that the other party doesn’t have the knowledge you have? The idea? The resources?
The best thing to do if you have an invention out there, just apply for the patent as soon as possible.
Patenting is a “First To File” Process
To see the challenge in the situation of not patenting first, it might help to realize that the process works on a first come first served basis. It’s referred to as the “First To File” process.
It is simple. The first person to file for a patent, he’s the one considered the owner of the patent.
This idea was a solution to curb the cases of people trying to steal already-existing inventions being ignorant of secured patents.
It’s pretty obvious that someone will steal an idea after seeing or hearing about it.
As such, it’s only natural for such a person to try and patent after the original owner already did it.
But in the event that the original owner never patented the innovation, then he is at a loss.
In the eyes of the USPTO, he will be the one to prove ownership; not the alleged thief to prove his.
In fact, the thief can even be the one suing the owner. Taking the first step can be his defensive move to keep the product.
Consider Making a Provisional Patent Application
With the costs involved, it’s quite understandable—though not at all excusable—that many would opt for the risks. In any case, haven’t many entrepreneurs started off this way?
But to help you safeguard your upcoming business, the government made it possible to get the same protection at a lower cost.
You do this by applying for the provisional patent.
A provisional patent application is different from the regular patent. Its purpose is to create room for you to apply for the regular patent later on. The duration you’re given to apply for the regular patent is 12 months.
If one year passes without you doing so, then the protection you had is forfeited.
In the event that you have a lawsuit concerning your invention and you provide your provisional patent, the ruling will likely be in your favor.
Keep in mind that the judge will consider other factors surrounding the case too.
Patent Your Invention in Other Countries Too (Especially China)
If you live in the US, patenting your products with the USPTO is key for business.
But that patent cannot protect your products outside the US.
If your idea is stolen by someone in another country, your US patent won’t help you in a legal battle.
The argument here is simple: other countries can also make inventions—and they do.
For that reason, you will do well to consider patenting your product in other countries too.
This is especially so if you intend to sell it outside the US.
Still, even if you’re only selling it in the US, e-commerce can enable someone else sell the product online.
As long as he is not a US citizen, you can’t stop him from doing so.
Most US inventions are sold within its borders. If they cross the borders, they often land in ally states who might respect US patents. One longstanding friendly country is the UK. Unfortunately, that cannot be said of all others.
China is known to steal intellectual property. The Israeli innovation mentioned above is not a rare case.
The US-China trade war which started in 2018 raises this issue. And not only is it from a purely business perspective, but also from a military one.
It has been reported that the Chinese J-20 fighter jet was built using data stolen from US military systems. Going by these reports, then you can see how much of a problem stealing inventions is.
MORE TIPS TO SAFEGUARD YOUR INVENTION
Apart from these steps you can take to protect your invention, there are a couple other things you can do to increase your business success rates.
Here are some things to consider even when you’re making your product known to backers.
1. Don’t Expose Your Trade Secrets
Intellectual property is a term which covers many different things.. Generally, anything that is derived from the mind through creativity qualifies to be called intellectual property.
This can include music, poems, software code, drawings, fashion clothing designs, car designs etc.
Still, there are other pieces of information which are very critical to the business or the successful operation of an invention. Such are what are called trade secrets.
These include things like formulas, processes, practices and other technical information which give you an economic advantage. These are the things which when your competitor knows, he’ll be able to produce an exact replica of your product.
Let’s consider the example of a car manufacturer. For him, trade secrets can include the exterior design, technical engine specifications, materials used to create the engine or body, suspension design etc.
If a competitor got these details, he could make something similar or even better.
This will take away the competitive edge the original inventor had.
2. Clearly Differentiate Your Invention from Others
When applying for a patent, you have to show that your product is truly unique.
This is the basis of calling it an invention. There must not exist anything similar to it.
Of course, there can be some sort of similarity and this is where the problem arises.
In such a case, it’s your ability to describe and elaborate on the uniqueness that will get you a patent.
Ensure you are technical and detailed with your illustrations.
3. Be Careful with Stranger “Co-Inventors”
As you market your new product on the crowdfunding site you choose, beware of those who comment giving you advice on how you can make your invention better.
This is good feedback that will come in handy later.
However, it’s wise to remember that unexpected challenges can never be completely avoided.
The same way someone may try stealing your idea, the same way someone may try to do it by indirectly contributing to it. If you include his contribution to the final product, he can then claim a part of it since his ideas are implemented in it.
In business, feedback from customers is used to improve products and services. Customers are happy about it and the company also benefits through additional sales and increased revenues.
Take note however that this is where the company is established. In your case, you aren’t. You probably haven’t even started your campaign. The chances of someone trying to play a trick on you is high.
How do you recognize such people?
They will often be busy giving you ideas even when everyone else is not.
Or if everyone is excited and giving you their thoughts, they are more dedicated and seem too interested in getting their ideas accepted.
They can even follow up through frequent communication to see whether you incorporated their thoughts into the final product.
Note that it doesn’t mean that anyone who is very excited about your invention is out to rob you.
To ascertain that, you’ll have to take your time or maybe just go by your instincts.
4. Protect Your Brand Too
If you’re set to run your own business, you might be having other intellectual property ready for take-off.
Two of these are your brand name or exact name of the final product and your trademark.
Do not reveal this information when crowdfunding. These can be stolen too, especially if they are catchy and easy to market.
The name of the upcoming company or product can be used to register domains and even set up websites and blogs. If this happens, you’ll have a hard time getting started since searching for an appropriate domain name can be challenging.
You may struggle coming up with the right name which is also available. This will delay your progress unnecessarily.
5. Be Ready to Manufacture
Since manufacturing is a big challenge and you can be beaten at it, try and seal a manufacturing deal before launching your campaign. This will help save the time used looking for a manufacturer after the funds have been secured.
Depending on what you’re manufacturing, consider Chinese manufacturers.
Although the Chinese are the ones commonly accused of insincerity, they happen to have cheap raw materials and labor.
These two resources make manufacturing in Chine cheaper than in other countries.
If you’re in a position to, visit your preferred manufacturer and see his work. Depending on the internet too much can cost you. You might fall into the hands of fraudsters.
6. Set Up an Online Store
After you have done all that, set up an online store for selling your own product. This can be implemented in various ways.
If you only have one product, then you won’t have much work to do. A simple plugin for your website or blog will be enough.
If you’re selling many products, consider going fully e-commerce.
You can also sell your product on Amazon. That will help you avoid the extra work of building your own e-commerce website.
With all the work you put in to invent your product, be wise to follow the advice given here.
You will be able to enjoy the fruits of your own labor if you protect your invention.
You can also consult an attorney for further help with these matters.
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