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Whether you are a creator, developer, or inventor, raising capital for your new invention can be one of the most difficult aspects of getting it off the ground. Crowdfunding allows project creators to use the Internet to raise the money needed to fund their projects. Through the investment of small amounts of money by many people, small businesses and solo entrepreneurs can finance their invention or product without going through the hassle of obtaining a traditional loan.

There are numerous options available on the Internet that entrepreneurs may utilize to raise capital. The goal of these campaigns is to publicize and bring public awareness to projects. Images, short videos, and concept introductions need to create a compelling narrative for potential investors.

However, there are dangers in putting a new product on a crowdfunding site. For a campaign to be successful, it needs to gain attention – but the more publicity a product or invention receives, the greater the likelihood that it may be stolen. Several companies have had their concepts copied during what would have otherwise been successful crowdfunding campaigns.


The first thing project creators should do is take stock of their valuable intellectual property. This may include trade secrets, patentable designs, copyrighted materials, and trademarks.

  • Patents: When a company believes that it has a fantastic new design for a product, it will want to validate its inspiration. By placing the invention online in a crowdfunding effort, it provides allows for feedback about the viability of the concept and gives the organization the opportunity to refine it. But how can this be done without opening it up to be copied? One possible answer is to file a provisional patent application. This provides the company with one year of “patent pending protection.” The organization will be able to vet its invention and raise money during this time; and, if things go well, then it can move to the next stage of the patenting process. While this may not stop competitors from trying to copy a product, it does provide the company with the legal ability to protect its product against counterfeiting.
  • Trade Secrets: Trade secrets include customer lists, confidential processes, and important names. There is no reason to disclose any trade secrets during a crowdfunding campaign.
  • Copyrights: Although protection for copyrighted material attaches the moment the material is created, it would be wise to file for additional protection. Registered copyright material provides its owner with the presumptive right of a copyright against all competitors.
  • Trademarks: Protection should also be sought for the company’s logo, slogan, and other trademarks. Before beginning the funding process, project creators should file registration applications at both the state and federal levels to ensure the maximum amount of protection for their marks.
  • Moreover, by going through the provisional patent process and by registering trademarks and copyrights, companies will discover if there are any competing products or marks already on the market. Campaigns can be derailed mid-way through due to patent, trademark, or copyright infringement. It is important that entrepreneurs obtain the proper licenses to use any protected images for their projects.

    There are many important legal considerations that businesses must take into consideration before beginning to raise funds through crowdfunding or other sources. An experienced business attorney in Los Angeles will be able to lead you through all the processes that create a successful campaign. The qualified lawyers at Hakim Law Group in Los Angeles will provide you with the counsel you require, and can be reached at 310.993.2203 or by visiting www.HakimLawGroup.com.