Nope, You Can't Patent A Generic Idea Like Crowdfunding

from the thank-you-alice dept

Thu, Jul 2nd 2015 1:44pm — Mike Masnick

Back in 2011, we wrote about Kickstarter going to court to ask for a declaratory judgment that a patent held by ArtistShare (7,885,887) was invalid, and thus, that Kickstarter was not infringing. As we explained at the time, ArtistShare and its CEO Brian Camelio had been going around to various crowdfunding platforms asking them to pay up over the patent. Camelio, never one to hold back his opinions, explained that he was going after Kickstarter because he really just didn't like the company:

"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."

Even if you agree with that statement, that's completely unrelated to the question of whether the patent is valid or if Kickstarter infringed. And, indeed, the court has now ruled that the patent is, indeed, invalid. Thankfully, between the time of Kickstarter filing for declaratory judgment and this ruling, the Supreme Court's useful Alice ruling came out, making it clear that you cannot patent "generic" computer functions. The ruling in this case relies heavily on that ruling and rejects the patent as nothing more than an "abstract idea" around "patronage" which is not patentable:

The ‘887 Patent’s claims are directed to the concept of crowd-funding or fan-funding, i.e., raising funds for a project from interested individuals in exchange for incentives. Whether the abstract idea in play here is defined as “crowd-funding,” “crowd-based funding,” “fan-funding,” “incentive-based patronage,” “incentivized crowd-funding,” or some other combination of these words is of no moment: the abstract concept at play in the Patent remains the same. Claim 1 broadly recites a “system for marketing and funding one or more projects of an artist” ... and the specification describes the invention as “methods and systems for obtaining financing from interested individuals to produce a creative work in exchange for an entitlement from the author of the work” .... These claims are squarely about patronage — a concept that is “beyond question of ancient lineage.” ...

Moreover, this concept of incentive-based funding is incontestably similar to other “fundamental economic concepts,” and to other types of “organizing human activity,” both of which have been found to be abstract ideas by the Supreme Court and the Federal Circuit.

Later in the ruling, the judge notes that everything in the patent is "well-understood, routine conventional activities." That is, the very opposite of what is patentable.

Nothing about the ‘887 Patent transforms the concept of crowd-funding into patent-eligible subject matter. Beyond the abstract idea of patronage, the claims merely recite “well-understood, routine conventional activities,” by requiring either conventional computer activities or routine data-gathering steps.

It's good to see a nice clean ruling, though it's too bad this had to sit in court for more than three years, wasting tons of resources that could have been focused on more innovations for creators and innovators. And, of course, it might not be over yet, as Camelio has suggested that he may appeal the ruling.

270091634 Kickstarter Sj (PDF)270091634 Kickstarter Sj (Text)

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Filed Under: brian camelio, crowdfunding, invalid, patents
Companies: artist share, fanfunded, kickstarter

9 Comments

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That One Guy (profile), 2 Jul 2015 @ 1:50pm

"Well there's your problem..."
He screwed up and had the patent heard in New York. He should have done what all the savvy patent trolls do and filed in East Texas, you can bet they would have upheld it and found it valid.
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Anonymous Coward, 2 Jul 2015 @ 1:58pm

ArtistShare and its CEO Brian Camelio are total morons. How they even got their patent is beyond me. It's like someone getting a patent for when someone enters the front door of a business, like a shopping market, and expecting to get paid by every business every time someone walks into their store.

It's lunacy.

You cannot patent something that's considered part of the consumer business structure. Trying to sue Kickstarter over crowdfunding. LOLS
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Mike Masnick (profile), 2 Jul 2015 @ 2:46pm

Re: "Well there's your problem..."
He screwed up and had the patent heard in New York. He should have done what all the savvy patent trolls do and filed in East Texas, you can bet they would have upheld it and found it valid.

Kickstarter beat him to court. They were the ones who filed for the declaratory judgment, perhaps to avoid that very issue.
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That One Guy (profile), 2 Jul 2015 @ 3:01pm

Re: Re: "Well there's your problem..."
Ah, smart move on their part then if that was the case. Keep a patent case out of East Texas, and people have much better odds of winning.
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Sheogorath (profile), 2 Jul 2015 @ 3:33pm

"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."
Which is just bullshit. KickStarter wouldn't even work as a crowdfunding platform if people didn't like what creators are offering enough to give them those 'handouts'. Simples!
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Anonymous Coward, 2 Jul 2015 @ 5:23pm

Guess this is the "small guy" that Mark Syman wants protected too...
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Bob Webster (profile), 2 Jul 2015 @ 9:39pm

Back in the USA
In the US, the USPTO is happy to award a patent for almost any idea, concept, or thought, no matter how trivial and regardless of prior art. After all, a patent WAS issued for the generic idea of crowdfunding.
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Seegras (profile), 2 Jul 2015 @ 11:13pm

Re: Back in the USA
Right. It's not like this patent on bronze-age technology wasn't approved...
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tqk (profile), 4 Jul 2015 @ 9:27pm

Re: Re: Re: "Well there's your problem..."
You'd think there's a business model hidden in there, such as if these a-holes even look at you, we'll warn you to seek a declaratory judgement against them, not filed in E. TX.

Why don't lawyers do useful things like this?
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