Crowdfunding platforms and IP enforcement

  • United States
  • 05/12/2017
  • Norton Rose Fulbright LLP © 2017. All Rights Reserved.

By Chandler Stephens (US)

In today’s world, intellectual property owners are well aware that social media users frequently post infringing content. Companies and brand owners have developed various strategies for enforcing their intellectual property rights on social media, utilizing methods such as demand letters and takedown requests. Often there are so many infringing uses that brand owners must be strategic with their enforcement efforts by developing guidelines for the types of infringement that are worth confronting. For example, an infringer that is impersonating a company or selling counterfeit goods on social media may be worth the time and cost of enforcement measures, while a user who posts a single copyrighted image may not justify such measures. In addition, a company may decide strategically to monitor only certain social media platforms that have a broad enough popularity or impact among the public.

One type of social media platform that is sometimes overlooked when developing enforcement strategies is crowdfunding sites. Crowdfunding sites like GoFundMe, Kickstarter, and Teespring have been popular for years, occasionally appearing in the news when high profile infringements are brought to light. For those readers who have not used these and similar sites before, a crowdfunding site enables creators to manage and share a fundraising campaign with other users of the site and across other social media platforms, in return for a percentage of the funds raised.

Campaigns can be created for nearly any type of project, including film production, video game development, tech gadgets and inventions, and clothing designs. Indeed, some of your favorite entertainment and products may have found their initial backing on a crowdfunding site. The wide variety of campaigns featured on both general and more tailored crowdfunding platforms means that these campaigns can implicate every type of intellectual property, including trademark, copyright, patent, and right of publicity. Like other social media platforms, these sites each have unique policies and procedures for reporting infringement and requesting that infringing content be removed.

The benefits of crowdfunding sites for entrepreneurs and independent creators are immense, allowing their offerings potentially to reach a large audience, gain grassroots support, and raise millions of dollars. On the other hand, crowdfunding users can easily infringe on the rights of intellectual property owners just as frequently as users of other types of social media. And to make matters more serious, crowdfunding campaigns are directly asking for contributions of money from the public. Although many infringing posts on social media can be mostly harmless, or not worth the effort of confronting, infringement in crowdfunding campaigns has a unique potential for harm because of its immediate connection with soliciting money.

Campaign organizers may be unaware of their infringement or believe their campaign is “fair use.” From the campaign organizer’s perspective, it is advisable to consider whether the project has been inspired by or incorporates the work of others, and what rights of third parties might be implicated by the content of any project. Further, extra care must be taken by campaign organizers who anticipate that their project will require a fair use defense to be permissible under copyright law. On the intellectual property owners’ side, fair use should also be carefully considered before taking any enforcement action.

On the other hand, a campaign organizer may be intentionally trading on the goodwill or creations of others to raise more funds. Because crowdfunding sites hold the potential to raise significant sums of money from their users, intellectual property owners would be wise to include these sites in their Internet and social media monitoring. Intellectual property owners should review their present enforcement strategies and consider developing guidelines for enforcing their intellectual property rights on a variety of crowdfunding platforms.