Posted on: 25 February 2015

Intellectual property

Your intellectual property (IP) is something unique that you have physically created. Not protecting your ideas could result in your campaign, or even your business, failing. This is because the nature of crowdfunding makes your ideas very public to a lot of people early on. This exposes you to the risk of someone stealing your idea, design, technology or process before you’ve had a chance to sell it yourself.

Philip Brown is Senior Associate Solicitor at Napthens law firm, where he specialises in IP. He has advised several businesses on how to protect their IP when crowdfunding.

There’s always a danger of giving away your secrets when you’re raising capital,” says Philip, because neither lenders nor investors will part with their money until they have enough information to decide that the project or business is going to be a success. “ But crowdfunding magnifies the risk because of the number of people involved,” he continues.

So it’s crucial to be wary of others stealing your idea – they might publish their own crowdfunding project using your IP or they might use it elsewhere for financial gain. The public nature of crowdfunding, and the vested interest of the platform to maintain its integrity and reputation, should eke out copy projects before people start investing (or indeed before they’re made public) but it’s a risk that you need to be aware of.

If you have come up with an answer to a problem, broadcasting the problem could result in someone else coming up with a different answer to solving it. There’s nothing you can do about that,” says Philip. However, there are several things you can do to make sure that the credit for something remains with it’s originator.

How to protect your intellectual property when crowdfunding

One of the key ways to reduce the risk of others stealing your IP is to say what it is your idea does, rather than how it does it,” says Philip.

So when you’re producing your crowdfunding video or writing about the project or business for which you’re raising funds, steer away from giving too much about how your idea works. Instead, focus on the difference it makes and the needs in the market that it satisfies. This is where making your business and your business case stand out really matters, because it takes some of the focus away from how your idea works and puts it on what it achieves instead.

Another way of protecting your IP is to register it. Registering things such as trademarks, patents, copyrights or design rights are all ways of protecting your ideas – but the registration process can be long, complicated and costly. Weighing up the pros and cons of registering your idea against managing how you share information about it is an important step – because you might find that registering it simply isn’t worth it.

If you do choose to protect your idea, be sure you have enough money to act on it should someone steal it. “It’ can be expensive to claim damages for patent infringement,” says Philip - litigation can be lengthy and you’re not guaranteed to win. “It’s all well and good having protection, but if you can’t afford to enforce it then it’s value is greatly reduced,” he says.

The timing of when you protect your idea is also important – you can’t get patent protection on something that is already in the public domain. “

"Start the process of protecting your IP before you launch your crowdfunding campaign,” says Philip, “that way you don’t prejudice any protection should you choose to get in later on.” Alternatively, don’t give away any details about what you’re seeking protection on during your crowdfunding campaign, and then protect your idea after your project is funded.

Compare business insurance

Compare quotes online:

Get quotes now

Or for expert advice call:


Request a call back


Business Guidance

How to Manage Crowdfunding Risks

25 February 2015

Business Guidance

How to manage the risks of crowdfunding - Fraud

25 February 2015

Business Guidance

How to manage the risks of crowdfunding - Ownership

25 February 2015

Protect your business against the unexpected

We specialise in sourcing the right business insurance solutions for businesses and understand that every business requires different cover to protect against the unique risks it faces. Compare quotes online or for insurance advice, speak to our knowledgeable insurance specialists today. Call:   .

Compare quotes online

The information and tools contained in this guide are of a general informational nature and should not be relied upon as being suitable for any specific set of circumstances. We have used reasonable endeavours to ensure the accuracy and completeness of the contents but the information and tools do not constitute professional advice and must not be relied upon as such. To the extent permitted by law, we do not accept responsibility for any loss which may arise from reliance on the information or tools in our Insight Hub.