Crowdsourcing can allow businesses to tap into a global pool of ideas to help with innovation.  Much like a mega-brainstorming session, it can provide a powerful way for businesses to garner ideas from multiple sources and gain access to a wealth of knowledge, expertise and creativity, which can be used to help generate new products or to solve a problem. 

Businesses can participate in crowdsourcing initiatives either as seekers or submitters of ideas.  However, for those considering crowdsourcing, it is important to be mindful of potential intellectual property (IP) issues that can surround crowdsourced ideas. 

 

1. Who Owns the IP?

One of the main issues to be aware of when engaging in crowdsourcing relates to the ownership of any IP associated with an idea.  Businesses seeking input from the crowd should ensure that the author of a winning submission can be readily identified and that any IP embodied in the idea is owned by that author and not ultimately by some other party, such as a contractor or the author's employer.  To help with this, businesses can require submissions to name all individuals who contributed to a work.  Businesses can also carry out checks to determine if third parties could be entitled to any IP created by those contributors.

 

2. Ensure Access to the IP

Businesses seeking new ideas should ensure they have the right to freely use any IP for their own benefit and that IP rights associated with a successful idea flow on to the business.  Access to IP rights can be achieved by acquiring ownership of the IP or by gaining permission to use the IP (i.e. a licence).  While participants of a crowdsourcing project might agree that a business can own or use the IP, it can be good practice to formalise this understanding through assignments and licences to ensure there is adequate access to the IP.

 

3. Be Aware of Third Party Rights

There exists the potential that a winning idea may not be based wholly on original work but may contain content sourced from third parties.  This content could include photographs, drawings or designs authored by other people.  There is also the risk that an idea might infringe existing IP rights, such as patents, trade marks or registered designs, owned by others even if the idea is independently developed by a contributor. If this occurs, a business could be faced with having to deal with an injunction and/or a claim for monetary compensation if found to be using third party content or infringing third party rights without permission.  Business owners may wish to obtain assurances about the originality of work from idea contributors to help manage the infringement risk.

 

4. Have Appropriate Terms and Conditions

Terms and conditions governing the conduct of a crowdsourcing project can help with defining the relationship between participants and their rights and obligations in relation to any IP.  Appropriately drafted terms and conditions can help make it clear that the author of a winning submission is obliged to assign (transfer) or license their IP in exchange for the payment or prize they will receive.  The terms and conditions can also specify that businesses acquiring the IP can have the right to apply for patents, trade marks or other statutory protection in relation to that IP.  Additionally, the terms and conditions can help mitigate liabilities that could be associated with crowd sourced materials by requiring contributors to warrant that submissions contain only original work and do not otherwise infringe any third party IP rights.  Law firms can help businesses when it comes to drafting or reviewing terms and conditions.

 

5. Check Governing Law

Where participants of a crowdsourcing project could be residents of different countries, or where a project is facilitated by a crowdsourcing platform that is based offshore, it will be necessary to understand which country's law is to apply in the management of the parties' relationship and the resolution of any disputes that might arise.  Terms and conditions associated with the project can specify which country's law is to apply.

 

The IP Take Home Messages

By harnessing the power of the crowd, a savvy business owner can gain access to a diverse knowledge base and can use it to advantage to help develop innovative solutions to business challenges.  When crowdsourcing ideas, there can be IP issues, but procedures and agreements can help businesses manage any potential issues and risks.  As always, in the event of any uncertainty, it is best to seek professional legal advice.

By Grace Chan, an Intellectual Property Specialist at Davies Collison Cave www.davies.com.au

 

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