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

Patents

from the thank-you-alice dept

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.

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