The movie studios, television networks, video game makers, and big-time music businesses on both coasts may wish to take note of a curious case playing out in the nation’s heartland. It’s raising some novel issues about how small defendants soon may fund and sustain themselves in lawsuits with powerful plaintiffs over a range of IP disputes, including contested copyrights, trademarks, and patents.

The defendant in this peculiar matter has taken to gofundme.com, a popular online crowdfuding source, to raise money for his case. Is this a new way to level the playing field between corporate IP Goliaths and David defendants? Could this create a new way for IP suits to make it to trial rather than settling out? Or could crowdfunding become a way for attorney’s to take on challenging cases–while ensuring they’ll get paid? And what are the ethics of fund-raising for lawsuits?

The controversies have gotten sufficiently acute that the Electronic Frontier Foundation, which calls itself the “leading nonprofit organization defending civil liberties in the digital world,” has asked to enter the case, particularly over questions it may raise about litigants’ First Amendment rights. What case could parties to take arms in such noisy fashion? This one, no kidding, involves safe arrows and fans who like to play fantasy games with them. So come, shall we, upon a quest to discover this new source of magical power?

Where the games begin

larparrowLet’s start with basics: the arrows in dispute are non-lethal. They’re favorites of those who engage in LARP-ing, aka “Live Action Role Playing.” Yes, fans get together to participate in a fantasy pastime where they physically act out a game. This includes dressing up like characters and acting out battles. Herein is where those arrows fly. Essentially this is Dungeons and Dragons, but acted out in the woods. (Full-disclosure: I have friends who LARP it’s actually pretty cool.)

Unfortunately for Jordan Gwyther, founder of the game website lapring.org, Global Archery Products contends he has infringed on the arrow manufacturer’s patent by selling their product, including at another web site upshotarrows.com. Global also says he has infringed on their trademark by claiming his arrows are “better than Archery Tag.”  The company has made a host of other claims, including unfair competition, false advertising and tortious interference with contractual relations. The case was filed last fall and still is in the pleadings phase.

But, soon after litigation began, Gwyther launched a crowdfunding campaign at gofundme.com to help cover his legal costs. He claims that Global’s lawyer told his counsel the company has budgeted $100,000 for its suit against him. In a video and on his blog page, he said the legal action could create a precedent that would “ruin larp forever.” Gwyther insists the arrows he sells are imported from iDV Arrows in Germany, and they differ from Global’s. He accuses Global of trying to win control of all “larp arrows,” a claim that can be buttressed by the broad way the company describes non-lethal arrows in its complaint against him.

Outspoken defendant

The merits of the case aside, Global is furious with Gwyther’s condemnation of the company. Global has sought court orders to get him to stop and to return $7,000 he has raised, so far.

Enter EFF, which has asked the court for permission to submit an amicus brief, opposing Global’s effort to restrain Gwyther’s commenting and crowdfunding, arguing to do so violates his First Amendment rights. The foundation sees Global’s position as a prior restraint on speech, and Gwyther’s statements as not commercial speech. The organization cites NAACP v. Button, 371 U.S. 415 (1963), arguing that “supporting litigation is itself protected First Amendment activity.” The group also raises interesting points about public scrutiny in patent claims, noting that, as Global has argued, all Gwyther’s customers are all potential infringers; this poses, broadly, tough “public policy questions regarding patent quality and litigation” including “how to best implement our patent system.”

With IP litigation difficult and expensive to fight, and larping jests aside, this case poses intriguing issues issues about gofundme and other crowdfunding options as ways that parties could pay costs in legal cases. Could crowd-sourcing level the playing field between litigants in copyright, trademark, and patent cases — lawsuits in which one of the parties (a Hollywood studio? a TV network? a recording company? a video game corporation) has major assets and resources, the other less so.

Some criminal cases already have tested this approach with defendants fighting prosecutors with lots of legal resources: Defendants George Zimmerman, Darren Wilson and Ammon Bundy have all have crowdfunded for their criminal defenses; one recent campaign (Daniel Holtzclaw’s) was taken down due to protests. Typically, under Son of Sam laws, criminals cannot profit from selling the story of their crimes, and their profits may be subject to forfeiture.

But what about crowdfunding for civil lawsuits?  A new company, LexShares, has sprung up to meet litigants’ crowdfunding needs.

If courts, however, constrain parties about how they can talk about their cases, can they make their appeals for help public, nosily at times, to also attract funding? There is scant case law on this topic and even the online resources are few and far between. There have been only a handful of cases touching on crowdfunding legal fees, and all of them operated under the theory that it was similar to any other fundraising means to pay for attorney’s costs. Further, it doesn’t appear as if any Bar organization in the United States, thus far, has issued an ethics opinion on crowdfunding and legal fees, though interest parties may wish to take a look at. Crowdfunding Your Law Practice; Tread Carefully, 75-May, Oregon State Bar Bulletin, 9.