Financing dreams: four legal risks of crowdfundinc your best ideas.

When Sunny T. wanted to launch a new line of titanium accessories, he did not get out his credit cards or call his rich uncle for a loan. Instead, he launched a Kickstarter campaign where people could contribute money to his venture, essentially pre-purchasing one of his key chains or other titanium designs and funding his business in the process.

Kickstarter, Indiegogo and dozens of other crowdfunding sites were created to help connect inventors with enthusiastic supporters who want to help fund the next big thing." Crowdfunding is an exciting concept, but before posting an idea and collecting donations, consider the legal risks and proceed with caution.

Seth Quest didn't consider all the consequences of crowdfunding, and last year he declared bankruptcy because a donor to his Kickstarter project sued him for nonperformance. Quest neglected to finish his project after collecting money from crowdfunding donors. Maybe the person who sued him was being unreasonable, but making promises and taking money does have consequences.

Here are four legal risks to consider before posting a project on a crowdfunding website:

Losing Patent Ownership

Disclosing your patentable idea starts a one-year clock under U.S. patent law. If a patent application is not filed during that time, then a patent cannot be filed on the products you have disclosed. Further, in virtually every other country where you might want to export your product, you simply will not get a patent on any idea disclosed to the public in enough detail that they can produce your invention.

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Since 2013, the America Invents Act has created a "first to file" patent system in the United States. Previously, it was possible to win a challenge to patent ownership by showing (with witnesses or documents) who .first created the invention. Now, it no longer matters who invented something first. What matters is who filed first at the U.S. Patent and Trademark Office.

Disclosing .an. idea on a crowdfunding website before filing a patent application may mean giving someone else everything they need to grab ownership of the idea.

Losing the Brand

Many crowdfunding projects involve creative works like independent films. For many others, the project will include a clever name--a brand for the project or the new product to be produced.

The basic rule is whoever applies to register a trademark first will get the registration and can block other similar trademarks from being registered...