Quirky’s Bankruptcy Worries Inventors

by San Antonio Attorney

The downfall of start-up company Quirky has left its inventors unsure about what will happen to their product ideas and unpaid royalties.

Quirky is an invention company backed by venture capital.  It found ideas for new products from a community of inventors online and eventually made them.  There are numerous sources that provided ideas as registered members of Quirky community.

The company filed for Chapter 11 protection in Manhattan bankruptcy court on Sept. 22, after months of difficulties.

Quirky has revealed in a blog post last month that Flextronics International has offered to pay $15 million for the start-up company’s subsidiary, Wink. Court papers filed show the Flextronics deal involves the intellectual property assets of Wink, which is software that enabled users to control household devices using their mobile phones.  However, the parameters of the sale are still unclear.

The Quirky.com platform will also be auctioned along with Powered by Quirky initiative and various intellectual properties.  Part of Quirky’s earnings was appropriated for the community when a product was sold.  A significant percentage of that was paid to the inventor, while the rest was distributed among members who were involved in research questions.  A source said that 5% of the community payout would usually be paid to participants in surveys.  According to one member, Quirky consistently maintained that payments to the community were different from operational profits.

In July, a quarterly payment to Quirky community members who were owed money was paid through their online accounts.  They were allowed “cash out” of those accounts to get money through their banking accounts, but   according to the source, they had not received the payout.

Another member of the community echoed another issue of numerous members, saying that Quirky has not been in contact with community members in regards to what can happen to the intellectual property of the inventions contributed by the community.

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