BizTech Law Blog
The JOBS Act, which became law on April 5, 2012, included for the first time in the U.S., a legal structure that will permit the use of general solicitation in connection with small, non-registered investment offerings in the context of crowdfunding. The SEC still needs to adopt implementing regulations before this funding vehicle becomes available and the market decides if it is viable. This will take several months, if not a year. But in the meantime, the naysayers are hard at work, proclaiming their opinion that crowdfunding is a dangerous idea.
From the perspective of the company seeking funding, many "experts" are sounding the warning that it is a very bad idea for a small, early-stage company to have a large number of small investors, which is likely to happen if capital is raised through investment crowdfunding. These experts are not wrong that this is a concern, but we believe that the risks can be managed in such a way as to make investment crowdfunding a viable vehicle to raise capital.
The JOBS Act, which became law on April 5, 2012, included for the first time in the U.S., a legal structure that will permit the use of general solicitation in connection with small, non-registered investment offerings in the context of crowdfunding. The SEC still needs to adopt implementing regulations before this funding vehicle becomes available and the market decides if it is viable. This will take several months, if not a year. But in the meantime, the naysayers are hard at work, proclaiming their opinion that crowdfunding is a dangerous idea.
This article is in response to the widely publicized belief that crowdfunding is nothing but an invitation for fraud. This is of concern primarily for investors. Many advisors to investors are sounding the alarm. From the beginning of time there has been and always will be fraud. But is crowdfunding investing really higher risk than all other types of investment? We think probably not. Here's why.
Legislation allowing victims of trade secret theft to sue in Federal court was introduced in the Senate recently. The Protecting American Trade Secrets and Innovation Act of 2012, sponsored by Senators Herb Kohl, Chris Coons and Sheldon Whitehouse, grants companies the option of using Federal courts to bring a civil lawsuit against offenders. The proposed law helps companies maintain their global competitive edge by ensuring an effective and efficient way to recover their losses from trade secret theft.
Recently in the case of Mayo Collaborative Services v Prometheus Laboratories, Inc., the Supreme Court of the United States found two patents invalid because they claimed subject matter that was not patentable. The patents in this case covered processes that help doctors who use thiopurine drugs to treat patients with autoimmune diseases determine whether a given dosage was too high or too low.
