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Crowdfunding and Culpability

We’ve talked before, you and I, about all the pitfalls that might decelerate, destroy, or otherwise damage the crowd funding movement that we all hold so dear. We’ve discussed how a high profile project failure might sink this ship, how bad publicity or a clever con man might take the winds of confidence out of its sails. We’ve even talked about how the ever increasing volume of projects might make the site ever harder to navigate. Going over any of these again would be old hat to my loyal readers.

Today, we have a new threat though – let’s call it a torpedo I didn’t see coming.

If you do create a project that fails to deliver, offends a great many people, violates a law, or perhaps ends all life on earth as we know it, is Kickstarter responsible for that in any way? Their answer is an emphatic no.

Really it’s more of an polite but firm chorus of noes. When you sign up for Kickstarter they tell you so, when you back a project they tell you so, when you create a project they tell you so (in triplicate,) and on their blog they discuss it more than once. No one can say that their position isn’t clear. To the best of my knowledge though, this position has never been tested, legally speaking.

A new news story is making the rounds the last couple days; you might have read about it, well – everywhere. 3D Systems is suing Formlabs; both companies are in the 3D printer trade, the former has been doing this since 1986, and the latter since 2011. Formlabs is an MIT spin off, and their greatest claim to fame is their wildly successful Kickstarter that they had, which raised just shy of 3 million dollars, over 3000% of their original goal. It seems that Formlabs thought that all the necessary patents to build what they wanted to build had expired – 3D Systems though thinks differently.

So why do the rest of us care? Kickstarter has been named in the lawsuit.

In the event that the case has merit, will the judge hold Kickstarter accountable as a sales partner that facilitated the crime as the lawsuit suggests, or will they see a blameless funding platform with no dog in the fight as Kickstarter will certainly position themselves? Right now, there is no way to know for sure, but as we have seen in the past, Kickstarter tends to be pretty proactive about these things. Even if they don’t lose a dime to this case, they will likely add a new disclaimer or a new step in the process to protect themselves in the future. That’s the best case scenario.

The worst case scenario would be the death of a company via giant fines. This is unlikely, but possible. In all likelihood, we’ll see something less severe than this; regardless – I’ll be keeping an eye on this story, and let you know if there are any updates, one way or the other.

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This entry was posted by David Winchester.

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