Crowdfunding has become a popular process for matching up entrepreneurs seeking capital with the masses of people who would like to participate in a project or venture, but are not venture capitalists.  Online donors commonly get something in exchange for their small donation like a prop from a movie they helped fund or one of the products developed from the funding.  Donations may be as little as $5 and the largeness is  only bounded by what a donor is willing to contribute.  One of the biggest players on the crowdfunding arena is Kickstarter. According to its website, since its launch on April 28, 2009, over $636 million has been pledged by more than 4.2 million people, funding more than 42,000 creative projects.  It’s pretty amazing that something that didn’t even exist 4 years ago can come into being and help generate over a half a billion dollars in funding in such a short period of time.  So, does Kickstarter have any patents on crowdfunding?  Probably not.

But Kickstarter is now up against something they probably didn’t anticipate when they began their matchmaking adventure. Kickstarter has recently been sued for patent infringement by 3D Systems.  3D Systems is a company that has developed 3D printing technology and is the owner of several patents in the 3D printing space.  So if Kickstarter is a website that solely matches up entrepreneurs with people willing to fund projects, how could they have been guilty of infringing on 3D Systems 3D printing patents?  Well, 3D Systems main target on this lawsuit is actually FormLabs, a company that used Kickstarter to raise nearly $3 million in funding to help develop its high definition 3D printer.  3D Systems alleges that FormLab’s Form 1 printer infringes on its patent and that Kickstarter helped to contribute to the infringement by allowing fundraising for the development of the printers to occur on its site.  3D Systems’ complaint filed in Federal District Court alleges that “Kickstarter knowingly or with willful blindness induced and continues to induce infringement and possessed specific intent to encourage another’s infringement by, or was willfully blind as to the ‘520 Patent.”  The ‘520 patent is 3D Systems’ patent covering “improved methods of stereolithographically forming a three-dimensional object by forming cross-sectional layers of an object from a material capable of physical transformation upon exposure to synergistic stimulation.”

Whether or not Kickstarter knew about the possibility of FormLabs printer infringing 3D Systems patent will likely come up in litigation.  Kickstarter may not have known much about the patent.  But this case could still impact the behavior of crowdfunding sites in the future.  Will there be a chilling effect on funding for projects that have patent infringement potential?  Will crowdfunding sites require some sort of freedom to operate analysis before allowing projects on their site for fundraising?  If crowdfunding sites are exposed to liability on suits like this one, it’s a good bet that patent infringement risk will be accounted for in some way.

Patents play a large role in entrepreneurship and business development in the United States and globally.  If you have an invention that you would like to protect or you think that someone else is infringing on your patent rights, please contact the patent attorneys at Clegg Law.