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12/19/2014 Dawn Sole turned to the Internet to fund her business. Then the Internet turned on her. - South Florida Business Journal

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From the South Florida Business Journal

:http://www.bizjournals.com/southflorida/print-edition/2014/12/19/dawn-sole-

turned-to-the-internet-to-fund-her.html

Dawn Sole turned to the Internet to fund

her business. Then the Internet turned on

her.

SUBSCRIBER CONTENT: Dec 19, 2014, 6:00am EST Updated: Dec 19, 2014, 9:11am EST

Celia Ampel

Reporter- South Florida Business Journal

Email | Twitter | Facebook

M iami entrepreneur Dawn Sole figured much of her struggle was over once she started an

Indiegogo crowdfunding campaign for her invention.

She had spent four years working on Pluck N' File, a "Swiss Army knife of beauty tools" that

includes a tweezer, an eyebrow comb, a nail file and a buffer.

Sole had a patent, a trademark, a prototype and an agreement with a manufacturer. All she

needed to do was raise about $25,000 to fund the first batch of products.

It was such a solid business plan that someone stole it.

When Sole Googled her company's name earlier this month, she found a copycat Kickstarter

page for her product. The page, which she hadn't started, included her company's name,

photos and her product descriptions, copied word-for-word.

The campaign had raised about 17,000 British pounds — or $27,000. Her own campaign, had

raised less.

"These guys were trying to raise the money, get the funds, and they weren't going to be able

to fulfill the orders, and they were gonna run," she said.

Sole and her lawyer sent a cease-and-desist letter to Kickstarter. The company stamped the

word "suspended" across the page, ending the fundraising campaign before money was

collected — but Sole worries that the page will continue to cause confusion and damage her

business.



"When people see it on Kickstarter, they're going to see Pluck N' File and they're going to

assume that it's me," she said. "They're going to think, 'OK, why was it suspended? What did

Pluck N' File do wrong?'"

Crowdfunding is a relatively new phenomenon, allowing entrepreneurs, artists and others to

raise piles of money through online donations. More than $5.1 billion was raised through

crowdfunding in 2013, up from just $2.7 billion in 2012, according to research firm Massolution.

Federal regulators are debating rules for equity crowdfunding, which was made legal through

the 2012 JOBS Act, working to close loopholes that leave consumers vulnerable to stock scams.

But non-equity crowdfunding is still something of a Wild West, with crowdfunding platforms'

policies abdicating responsibility for users who defraud consumers and small business owners

like Sole.

Kickstarter, for instance, lets users know that it can't be held accountable for projects that raise

funds on its site.

And successful campaigns can range from the brilliant to the ridiculous. For instance, users

contributed $10 million for the Pebble smartwatch, but also gave $55,000 to a man named

"Zack Danger Brown" who said he was using the money just to make potato salad.

"Kickstarter does not guarantee projects or investigate a creator's ability to complete their

project," the company's website states. "On Kickstarter, backers ultimately decide the validity

and worthiness of a project by whether they decide to fund it."

The crowdfunding site does try to prevent copyright infringement and other scams, Kickstarter

spokesman David Gallagher said in an email.

"If we find that projects are in violation of our rules — for example, if the creator is

misrepresenting facts about themselves or their project — we will take action, which may

include suspending the project," Gallagher wrote. "Suspensions are permanent and not

reversible."

But when asked how many complaints Kickstarter receives each year, or whether the company

ever removes pages from its website after suspending them, Gallagher declined to answer.

"Unfortunately, I can't provide more information about our policies in this area," he wrote.

Sole is consulting with Miami attorney Loren Donald Pearson to see what legal action she could

take. If she files suit, she will be one of the first.

Washington state's attorney general filed the first consumer protection lawsuit involving

crowdfunding in May, suing a businessman who failed to deliver on a Kickstarter campaign for a

card game.

Pearson, an intellectual property lawyer with South Florida business law firm Assouline &

Berlowe, said Kickstarter could well be protected from a lawsuit.



"There are safe harbors for companies like this who are posting submissions by third parties,"he said. "We have to look to make sure they've complied with requirements under the DigitalMillennium Copyright Act."

Pearson said the person behind the fake Kickstarter campaign could certainly be liable forpatent infringement, trademark infringement and unfair competition. The trouble is, he maynever know who the trickster is.

Kickstarter almost definitely has bank account information and an email address for thecampaign's creator, but Pearson hasn't been able to get that information for his client.

"So far, [Kickstarter has] been kind of hiding behind their privacy policy and not telling us aboutthe person who posted the project," he said. "If that continues, we may have to subpoena thatinformation or even file suit against Kickstarter to get that information."

Sole's Indiegogo campaign closes Jan. 2. She wishes that Kickstarter would close down the fakecampaign or at least redirect donors to her real page on Indiegogo — but until then the PluckN' File creator will fight the company tooth and nail.

"I know this has definitely happened to other people because I could see the loopholes," shesaid. "If I could make a difference with my story, I have no problem being the example of whatcould happen if you're not careful and you're not doing your homework."

Celia Ampel covers technology, startups, venture capital and angel investment. Stayon top of the latest venture news with our free daily newsletter. Click here tosubscribe.