Should I Protect My IP Before Launching My Crowdfunding Campaign?

Emily Young

• 21 July 2021
• 12 August 2021
• 5 min read

If you have come up with an innovative business idea, chances are you will need funding to get it off the ground. A crowdfunding campaign is one way that you can raise funds to launch your product or idea. As well as being a source of funds, crowdfunding campaigns also provide insight into consumer interest, which is beneficial to your business.

While there are several advantages to launching a crowdfunding campaign, there are also risks involved that you should not ignore. Primarily, these risks relate to your business’ intellectual property (IP). To help you better understand the relationship between crowdfunding and IP, this article will take you through: 

• what crowdfunding is; 
• the most common types of IP; and
• the potential risks involved with your crowdfunding campaign.

What is Crowdfunding?

Crowdfunding has become an increasingly popular way to raise small amounts of capital to fund a project or business venture. Financing typically relies on a small donor pool with large amounts of funds. However, crowdfunding is a type of alternative finance where many people donate smaller amounts of money. There are several varieties of crowdfunding. However, it is overall a great alternative way to access funding, giving you the chance to connect with investors outside of your typical investment pool.

Furthermore, crowdfunding is used internationally to fund a variety of ventures across both the for-profit and not-for-profit sectors. In 2015 alone, more than USD $34 million was raised through crowdfunding worldwide.

What is Intellectual Property?

IP refers to intangible assets. IP is capable of having legal rights and protection. The most common forms of IP protection are outlined in the table below:

If you plan on crowdfunding for your business venture, this will inevitably expose your brand or product to the public.

Protecting Your Business

While there are many benefits to crowdfunding, there are a number of risks as well. These risks primarily relate to your business’ reputation and IP.

1. Reputation

Reputation and IP are closely linked. This is because your business’ IP is its brand, and any damage to one will impact the other. For example, if your crowdfunding campaign fails to generate interest, this may negatively impact your brand’s reputation. This can have long term impacts on your business’ success. 

2. Intellectual Property Protection

Engaging in a crowdfunding campaign is seen as a risk to your business’ intellectual property. This is because it requires businesses to provide details about their product in the early stages of funding and development. This increases the risk that others will copy their ideas or branding. To avoid this risk, it is recommended that you protect your IP before launching your crowdfunding campaign. However, this may have its own challenges, such as having little funds to apply for trade mark registration or a patent. Despite this, the costs involved with applying for such IP protection far outweigh the potential downsides, such as having your brand or idea stolen.

Key Takeaways

Launching a crowdfunding campaign does not have to mean that you forfeit your IP protection. Instead, you should consider protecting your IP before seeking funding through a crowdfunding campaign. Some of the risks associated with a crowdfunding campaign include risks to your:

• reputation; and
• intellectual property protection.

Overall, protecting your IP is an excellent way to reduce the premature exposure of your IP and therefore minimise risk. If you need help protecting your IP or trade mark legal assistance before your crowdfunding campaign, get in touch with our experienced trade mark lawyers on 1300 657 423 or fill out the form on this page.

Frequently Asked Questions