Crowdfunding and IP Compliance
This year has already been one for the books for the technology community. For example, we've seen the Defend Trade Secrets Act make its way into law in early May, and just last week, important provisions of the JOBS Act rule-making were made final- Crowdfunding. While there are a host of rules around the the dos and don'ts to soliciting funds from the crowd here are just a few:
Issuer limits of raising no more that $1,000,000 in a rolling 12-month period
Investor income thresholds of $100,000 triggers certain investment limits
Issuers must use a registered SEC or FINRA intermediary (platform) to conduct the offering
Financial statements in accordance with GAAP are required of Issuers
While these rules mark a significant milestone in the start-up and investment community, let's not get ahead of ourselves and forget the importance proper IP compliance before diving headlong into a crowdfunding campaign. A few dos and don't's...
Do: Protect IP before disclosure
Don't: Post or share technology before you have properly secured the appropriate and relevant IP protections.
Do: Obtain the appropriate copyright permissions around the music, art, or other copyrighted works used in the solicitation before posting on the crowdsourcing platform.
Don't: Assume you can copy someone's original creative work without the appropriate permissions or licenses. The result could be a take-down of the crowdfunding site, which could greatly disrupt your campaign.
Do: Obtain an IP compliance review before you begin your crowdsourcing campaign
Don't: Assume the only compliance at play is with the SEC and FINRA. Proper IP compliance could also make the difference between a successful offering or a busted one.