Crowdfunding Patented; Kickstarter Threatened, Asks Court To Invalidate

from the can-they-crowdfund-their-defense dept

Wed, Oct 5th 2011 3:25pm — Mike Masnick

Back in 2004, I first wrote about musicians using a platform called ArtistShare to help raise funds from fans. It was an early version of crowdfunding -- but as I noted in the post itself, it was no different than a number of similar ideas that were out there. ArtistShare was definitely a part of the first wave of similar offerings, which included things like Sellaband and Bandstocks. It's was a great idea, but it wasn't exactly original. More recently, a second generation of such companies has become much more well known and much more successful... with Kickstarter definitely being the big name in the space.

It turns out that ArtistShare's CEO, Brian Camelio, applied for a patent on the basic concepts of crowdfunding back in 2003, and, while it took a while, that patent (7,885,887) was issued earlier this year, officially for "Methods and apparatuses for financing and marketing a creative work." You can read the details, but it basically describes exactly how most crowdfunding works today. Apparently, he then started contacting Kickstarter (and, one imagines, several other crowdfunding platforms), trying to get them to pay up. With Kickstarter, he apparently sent a couple of letters and then showed up unannounced at their offices one day.

After going back and forth with him for a bit, being threatened with a possible lawsuit, and noticing that Camelio had transferred the patent to a new operation called Fan Funded, which they believed was to be used for suing others for patent infringement, Kickstarter filed for a declaratory judgment saying that the patent was invalid and, even if it was valid, that they didn't infringe.

In an interview with PaidContent (at that link above) it appears, bizarrely, that part of the thinking on Camelio's part is that he just doesn't like Kickstarter compared to his own business:

"As an artist myself, I feel that KickStarter may be hurting artists by focusing on 'donating money' rather than celebrating the artist for what they do. Their model does not build fan relationships but just continually asks for hand outs."

Here's the thing: I actually agree that this is a major weakness of Kickstarter's model and have said so to people who have asked me about Kickstarter in the past. It's a one-and-done sort of thing. But... the way to respond to that is to build a better product that serves the market better. If you don't think Kickstarter does the best job serving artists, then make your product better. Don't threaten them with patent infringement and try to justify it by claiming you just don't like Kickstarter's model.

Hopefully the court rejects such a broad and obvious patent. Perhaps Kickstarter should crowdfund its legal efforts here. Amusingly, as pointed out by THREsq, one of the latest Kickstarter projects is a book from a patent agent celebrating the artwork found in patents...

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Filed Under: brian camelio, crowdfunding, patents
Companies: artistshare, fan funded, kickstarter

33 Comments

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Anonymous Coward, 5 Oct 2011 @ 3:58pm

Perhaps someone should Kickstart a campaign to overturn ridiculous patents.
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Anonymous Coward, 5 Oct 2011 @ 4:12pm

Is this another toast patent?

Bread refreshing method
http://www.patentgenius.com/patent/6080436.html
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Anonymous Coward, 5 Oct 2011 @ 4:21pm

Toast patent detected.

"A method of refreshening a bread product by heating the bread product to a temperature between 2500.degree. F. and 4500.degree. F. The bread products are maintained at this temperature range for a period of 3 to 90 seconds.
Claim: What is claimed is:"

#6080436
Title: Bread refreshing method
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That Anonymous Coward (profile), 5 Oct 2011 @ 4:21pm

Its not that I think they are infringing, its that they are doing it wrong... *boggle*

How is this spurring innovation?
His answer is to use his patent to drive the competition out of business or extract huge sums of cash because they aren't doing it right.
And because he filed for paperwork he gets to decide how this entire market space is supposed to advance and behave.

How can there be any competition when all one needs to do is write up a passable application and get it filed first, then wait for someone to get remotely close to your idea and then sue them?

Intellectual Property is our most valuable asset, that has been the battle refrain.
Intellectual Property law in its current state is killing innovation. Isn't that a bad thing?
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Anonymous Coward, 5 Oct 2011 @ 4:22pm

Re:
You are infringing on my time-stamp mate.
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Anonymous Coward, 5 Oct 2011 @ 4:35pm

For laughs, ridiculous patents that are granted.
http://anticipatethis.wordpress.com/?s=they+invented+what
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Anonymous Coward, 5 Oct 2011 @ 4:40pm

Making cookies can get you sued.
http://holmansbiotechipblog.blogspot.com/2011/09/university-sues-makers-of-heart-healthy.html
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techflaws.org (profile), 5 Oct 2011 @ 10:02pm

Wasn't David Bowie the first one to offer shares on a musician('s work)?
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Anonymous Coward, 5 Oct 2011 @ 10:42pm

I want to obtain a patent on the process of obtaining bad patents.

A patent on the process of obtaining a bad patent whereby one does one of the following

A: Bribe the USPTO examiner.

B: Use difficult words in hopes to confuse the USPTO examiner into approving a patent due to not understanding the patent request.

C: Threaten to appeal the patent rejection if the patent is rejected and follow through. Let the USPTO know that it could easily avoid a very time consuming and frustrating appeal process if only it rubber stamped your simple patent. Provide the USPTO with rubber stamps.

D: Take the USPTO examiner out to a nice fancy dinner.

F: If the above may not be working, pull the racism card.
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Anonymous Coward, 5 Oct 2011 @ 10:47pm

Re:
F: Claim that you're being discriminated against based on race, age, or gender.
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Anonymous Coward, 6 Oct 2011 @ 12:36am

Quote:
America's rise as an industrial power was fueled by our willingness to ignore others' patents. Our rise as an intellectual power was fueled by our willingness to ignore others' copyrights. Ben Franklin didn't pay royalties, and neither did most American publishers until our "balance of intellectual payments" with the world turned positive, late in the 19th century.

Source: http://opensource.com/business/11/10/uneasy-relationship-between-open-source-and-profit

If we want to see America grow again we must slay the IP dragon now.
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AnonCow, 6 Oct 2011 @ 12:37am

I am patenting this thing I call a 'corporation'. You can buy 'shares' of this new type of legal entity and then earn money by the appreciation of the shares and/or a dividend paid to the 'shareholder'.

Call me crazy, but but I think I'm on to something.
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Daeng Bo, 6 Oct 2011 @ 1:29am

Maybe this exists ...
Maybe this exists, but I think a "public offering" might work as a website, where instead of donating, fans are asked to invest and receive a share in the next production.

Provide a demo track or two of the album, a mock-up of the software, or a storyboard for a movie in order to track investors. They get a free copy when the product releases and a share of the profits based on the investment. The site takes a CC-like percentage.

I'm sure somebody's doing it already, buy I haven't heard of them.
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ECA (profile), 6 Oct 2011 @ 2:02am

iV THOUGHT ABOUT THIS
I would say the CHURCH has the first copyright..not registered.
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Strawbear (profile), 6 Oct 2011 @ 2:54am

I'm copyrighting being nice to people.

From now on the rest of the world have to be complete bastards to each other.

Oh. Looks like I didn't need a copyright for that to happen.
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Anonymous Coward, 6 Oct 2011 @ 3:19am

Hes just jealous
hes just jealous since Kickstarter is a better name then ArtistShare.
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The eejit (profile), 6 Oct 2011 @ 4:02am

Re: iV THOUGHT ABOUT THIS
Nope. Well, not the Catholic Church, but the King James Bible of 1612 is still under copyright, though the Letters patent (not to be confused with current patents) of His Majesty, James Stuart.
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Anonymous Coward, 6 Oct 2011 @ 5:38am

Mike, I am starting to think I understand why you hate patents so much, and why you are very wrong to feel that way.

You almost got it when you mention that the patent was applied for in 2003. But at the end of your post, you dismiss the patent as "a broad and obvious patent", ignoring the simple fact that you are looking back with 8 years of experience.

In 2003, this wasn't broad and obvious, it was a new idea. According to Wikipedia, "The term "crowdsourcing" is a portmanteau of "crowd" and "outsourcing," first coined by Jeff Howe in a June 2006 Wired magazine article "The Rise of Crowdsourcing".". So the patent application pre-dates the cool name by 3 years.

What seems broad now wasn't all that broad at the time. You cannot revoke a patent today because the market place has broadened under it.

Your misunderstanding of patent law is frightening.
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Anonymous Coward, 6 Oct 2011 @ 6:22am

Prior art possibility - Dave Sim (publisher of the Cerebus comic) suggested a crowdsource approach in the early 90s, ie., that artists/writers who wanted to self-publish could find retailers willing to invest upfront. Martin Wagner followed that model to publish his Collegiate Hepcats collection under his own banner.

http://www.amptoons.com/howto/sim/173.html
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ts, 6 Oct 2011 @ 7:16am

Got some change, man?
What's the difference between this patent and hobos on the streets asking for change?
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Anonymous Coward, 6 Oct 2011 @ 7:22am

Re:
Those broads, I tell ya they know nothing.
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Robert Doyle (profile), 6 Oct 2011 @ 7:29am

Ummm... how do you patent a gift?

If it isn't a gift, and there is some exchange of value, it functions more like a shareholder organization - if you contribute, you get value, but clearly not exactly as you don't get ownership.

I don't think just renaming or tweaking a common community concept should be patentable.
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Anonymous Coward, 6 Oct 2011 @ 7:49am

Re:
From the same wikipedia article you used to get your 2006 Wired magazine date before which, you hilariously claim, crowdsourcing didn't happen because the word didn't exist yet:

"Early examples

The Oxford English Dictionary (OED) may provide one of the earliest examples of crowdsourcing. An open call was made to the community for contributions by volunteers to index all words in the English language and example quotations for each and every one of their usages. In the 70 year project, they received over 6 million submissions. The making of the OED is detailed in The Surgeon of Crowthorne by Simon Winchester.
Augusto Boal's Theatre of the Oppressed provides early examples of crowdsourcing in theatrical performances. Boal's models give emphasis to the participants, and the influence their collaboration has on their performances.
In 1994, Northeast Consulting compiled a database of trends in the marketplace. This database was collected from numerous sources, offering an example of early crowdsourcing.

....

Historical examples

The Alkali Prize
The Longitude Prize
Fourneyron's Turbine
Mathematical Tables Project
Montyon Prizes
Nicolas Appert and food preservation
Loebner Prize
Millennium Prize Problems"

More examples available here: http://en.wikipedia.org/wiki/List_of_crowdsourcing_projects

What have we learned today AC? Hopefully we've learned that things can exist as a standard practice and certainly as a well known concept before someone invents a clever word for a magazine to refer to said concept or practice.
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Anonymous Coward, 6 Oct 2011 @ 7:51am

Re: Re:
It's a nice list, but they all point in the wrong direction: They point at collecting money for a "prize" or award for something completed. Crowdsourcing / funding is all about getting people and money involved up front to finance a specific project, not to encourage a competition.

What have I learned? That poor examples don't disprove the patent, rather they strengthen it by showing how even those who claim to understand crowsfunding fail at the most basic levels.
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MD, 6 Oct 2011 @ 10:22am

Obvious and Old
Is this not simply music as shareware as found in the mid 80's? "If you like this program, please send me $25." Heck, Pournelle has been doing this for Chaos Manor for almost 15 years. "If you like what you read here, send me a donation...". Oh wait, guys on street corners with a guitar have been doing this for 50 years.

Just changing the technique, media, topic or the focus of begging does not make it patentable.
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Anonymous Coward, 6 Oct 2011 @ 7:07pm

Re:
I believe IBM already has a patent on that.
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Anonymous Coward, 7 Oct 2011 @ 12:13am

Re: Re: Re:
Yeah, it's not like anyone ever solicited groups of people to finance projects before this patent.
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staff, 7 Oct 2011 @ 7:02am

another biased article
"broad and obvious patent"

meaning: patents my clients are adverse to

Masnick has an unreported conflict of interest-
https://www.insightcommunity.com/cases.php?n=10&pg=1

He sells blog filler and "insights" to major corporations including MS, HP, IBM etc. who just happen to be some of the world�s most frequent patent suit defendants. Obviously, he has failed to report his conflicts as any reputable reporter would. But then Masnick is not a reporter. He is a patent system saboteur receiving funding from huge corporate infringers. He cannot be trusted and has no credibility. All he knows about patents is he doesn�t have any.
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Anonymous Coward, 18 Oct 2011 @ 1:02pm

I hope Kickstarter survives this patent challenge. It's been a book to countless artists, entrepreneurs, and other creatives who work outside the mainstream's machine. Of course, maybe that's one reason why it's come under attack.
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Ken D. Webber, 16 Feb 2012 @ 12:56pm

Re: Re: Re:patent is invalid
The patent is invalid. Marillion was already engaged in crowdsourcing in 1999 for a musical project. And then, there's Paypal. Camelio filed his patent in 2003. It is invalid as there is no originality to his idea, which was already in use in business long before he filed his patent.
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Anonymous Coward, 17 Dec 2013 @ 11:48am

Kickstarter is the aggressor
Hmmmm. Contrary to what is being discussed here, Kickstarter seems to be the aggressor here. Read the case history. It is also interesting to point out that Camelio does have an active and successful crowdfunding site that was launched in 2003. If one reads even further, Kickstarter actually applied for similar patents (plural) and cited ArtistShare's patent as prior art during the process.

chen chen

var docstoc_docid='165688239'; var docstoc_title='chen'; var docstoc_urltitle='chen';
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Anonymous Coward, 17 Dec 2013 @ 12:25pm

Re:
I agree. The misunderstanding of patents and how they work is pretty appalling when reading this article and the comments. This entire article, comments and all seem to be generated by Kickstarter's PR folks or a least someone with a bias and a few friends to post comments. I guess Kickstarter can do that when trying to crush a small entity after receiving a $10M investment. The Internet has killed journalism as we know it and young spoiled CEOs think they are above the law once their company enjoys some success. Educate yourselves on what a patent actually is, and stop just following the pack. Most of the comments here show a complete lack of understanding of the law and the patent being discussed.
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Anonymous Coward, 17 Dec 2013 @ 12:54pm

Re: another biased article
Exactly! This guy who writes this blog is so biased it's laughable. Look at all of the pro-Kickstarter articles he has written. He probably has an interest in the company. I can't stand these types of blogs that pretend to be "reporting". What a joke!
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