Wednesday, June 13, 2012

Cloudfundraising for Lawyers: How to Confuse a Counsel brings us this week's education in cloudfunding. I have long thought to review the legal and ethical mechanics of the thing ever since President Obama signed the cloudfunding provisions of the JOBS Act. He did this over strenuous objections from the SEC, which is new in and of itself. BoingBoinb beat me to it, and reality is stranger than any hypothetical I could have created to illustrate the possibilities of cloudfunding.

The entire story is posted here.

It sort of reminds of the Flying Circus sketch, "How to Confuse a Cat."

Long story short, FunnyJunk and The Oatmeal are sort of the Hatfields and McCoys of the create-and-repost world of the internet. The thing started when The Oatmeal claimed FunnyJunk stole its original comics, reposted, and monetized them. The Oatmeal produces original content that's actually pretty good.

In a gesture of bonhommie, the owner of FunnyJunk to some of the stolen material down. Nice.

If you're The Oatmeal, all done and settled, right? Wrong.

Enter Charles Carreon, the litigator who successfully litigated the case. For Internet geeks like me, this is the case that made website domains personal property. So, apparently, he knows a thing or two about shenanigans on the internet.

Carreon is no slouch. He sent a demand letter to TheOatmeal, requesting damages for defamation because TheOatmeal's post accused FunnyJunk of copyright violation, which can - under certain circumstances - be a criminal offense. Oh, and that TheOatmeal had defamed FunnyJunk. When a defendant defames a claimant by accusing them of a criminal act, that's Defamation Per Se. For such defamation, FunnyJunk required $20,000. If it was not paid, FunnyJunk and its incredibly successful internet lawyer would take to federal court.

Matt Inman, TheOatmeal's founder, responded in kind, sort of, by proposing that any $20,000 paid in response to the letter should go to cancer research. Inman then started a fundraising campaign on IndieGoGo to get the $20,000 for cancer. Inman raised the $20,000 in 64 minutes. To date the campaign has raised $142,000.

Carreon has filed a complaint with the crowdfunding site, asserting that the campaign violates IndiGoGo's standards. IndiGoGo remains silent on the matter, but Carreon is confused, according to an MSNBC article:

"I really did not expect that he would marshal an army of people who would besiege my website and send me a string of obscene emails," [Carreon] says. ... "It's an education in the power of mob psychology and the Internet," Carreon told [the reporter].
Now I don't post this to mock FunnyJunk or it's attorney. They're doing that job very well themselves. The true lesson here is not the power of the Internet or mob psychology. 

Rather, lawyers should be aware of the power of crowdfunding and educate themselves - there is a powerful new game out there, and it's a frontier worth exploring.

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