Invention Promotion Firms
Think you have a great idea for a
new product or service? You're not alone. Every year,
tens of thousands of people try to develop their ideas
and commercially market them.
Some people try to sell their idea
or invention to a manufacturer that would market it
and pay royalties. But finding a company to do that
can be difficult. As an alternative, others use the
services of an invention promotion firm. Indeed, some
inventors pay thousands of dollars to firms that promise
to evaluate, develop, patent, and market inventions...and
then do little or nothing for their fees.
Unscrupulous promoters take advantage
of an inventor's enthusiasm for a new product or service.
They not only urge inventors to patent their ideas or
invention, but they also make false and exaggerated
claims about the market potential of the invention.
The facts are:
- few inventions ever make it to the marketplace;
and
- although a patent can provide valuable protection
for a successful invention, getting a patent doesn't
necessarily increase the chances of commercial
success.
There's great satisfaction in developing
a new product or service and in getting a patent. But
when it comes to determining market potential, inventors
should proceed with caution as they try to avoid falling
for the sweet-sounding promises of a fraudulent promotion
firm.
Using Invention Promotion Firms
Advertisements for invention promotion
firms are on television, radio and the Internet, and
in newspapers and magazines. These ads target independent
inventors with offers of free information on how to
patent and market their inventions. Often, however,
the only information you get is about the promoter.
If you respond to the ads —
which may urge you to call a toll-free number —
you may hear back from a salesperson who will ask for
a sketch of the invention and information about you
and your idea. As an inducement, a firm may offer to
do a free preliminary review of your invention.
Some invention promotion firms may
claim to know or have special access to manufacturers
who are likely to be interested in licensing your invention.
In addition, some firms may claim to represent manufacturers
on the look-out for new product ideas. Ask for proof,
such as contacts at manufacturers, before you sign a
contract with any invention promotion firm that claims
special relationships with manufacturers. If the promoter
provides only one or two names, be careful: The contacts
may be "shills" — people hired to give
favorable testimonials.
After giving your invention a preliminary
review, a firm might tell you it needs to do a market
evaluation of your idea — for a fee that can be
several hundred dollars. Many questionable firms don't
do any genuine research or market evaluations. Sometimes
the "research" is bogus, and the "positive"
reports are mass-produced in an effort to sell clients
on additional invention promotion and marketing services.
Fraudulent invention promotion firms don't offer an
honest appraisal of the merit, technical feasibility,
or market potential of an invention.
Some invention promotion firms also
may offer a contract in which they agree to help you
market and license your invention to manufacturers.
Unscrupulous promoters may require you to pay a fee
of several thousand dollars in advance, or to agree
to make credit payments instead. Reputable licensing
agents usually don't rely on large advance fees. Rather,
they depend on royalties from the successful licensing
of client inventions. How can they make money when so
few inventions achieve commercial success? They're choosy
about which ideas or inventions they pursue. If a firm
is enthusiastic about the market potential of your idea
— but wants to charge you a large fee in advance
— take your business elsewhere.
Inventor Protections
If you're interested in working with
an invention promotion firm, here's information that
can help you avoid making a costly mistake.
Check References
- Ask the promoter to give you the names of many
previous purchasers so that you can pick and choose
who to call for references. Again, beware of shills.
- Fraudulent invention promotion firms may promise
to register your idea with the U.S. Patent and Trademark
Office's (USPTO) Disclosure Document Program. Although
many scam artists charge high fees to do this, you
can do it for $10 by filing your document with the
USPTO directly. The disclosure is accepted as evidence
of the date of conception of the invention, but it
doesn't offer patent protection.
- Unscrupulous firms often promise that they will
exhibit your idea at trade shows, but don't actually
go to these trade shows, much less market your idea
effectively. Check with previous clients and trade
show sponsors about whether their ideas were exhibited.
- Many unscrupulous firms agree in their contracts
to identify manufacturers by coding your idea with
the U.S. Bureau of Standard Industrial Code (SIC).
Lists of manufacturers that come from classifying
your idea with the SIC usually are of limited value.
Tips Before Moving Forward
Contracting for the services of an
invention promotion firm is no different from making
many other major purchases. Apply some common sense.
- Question claims and assurances that your invention
will make money. No one can guarantee your invention's
success.
- Investigate the company before you make any commitment.
Call the USPTO at 1-866-767-3848, and the Better Business
Bureau, the consumer protection agency, and the Attorney
General in your state or city, and in the state or
city where the company is headquartered. Under the
American Inventors Protection Act of 1999, invention
promoters must give you the names and addresses of
all invention promotion companies they have been affiliated
with over the past 10 years. Use this information
to determine whether the company you're considering
doing business with has been subject to complaints
or legal action.
If a promoter causes you financial
injury by failing to make the required disclosures,
by making any false or fraudulent statements or
representations, or by omitting any fact, you have
the right to sue the promoter and recover the amount
of your injury plus costs and attorneys' fees.
In addition, while the USPTO has
no civil authority to bring law enforcement actions
against invention promoters, it will accept your
complaint and post it online if you complete the
form, Complaint Regarding Invention Promoter,
at www.uspto.gov/web/forms/2048.pdf.
The USPTO also will forward your complaint to the
promoter, and publish its response online. To read
complaints and responses, visit Inventor
Resources at www.uspto.gov/web/offices/com/iip/index.htm.
- Make sure your contract contains all the terms
you agreed to — verbal and written — before
you sign. Often the contract says one thing but the
salesperson says something quite different. If possible,
ask an attorney to review the agreement.
- Remember that once a dishonest company has your
money, you may never get it back. You may have to
sue the company under the American Inventors Protection
Act of 1999, which permits a customer to recover for
injuries, costs, and legal fees if a promoter has
failed to make disclosures, made any false or fraudulent
statement or representation, or omitted any material
fact, to a customer. You have the burden to show that
the law has been violated.
For More Information
- U.S. Patent and Trademark Office
The USPTO offers information about
patents and trademarks. Write: U.S. Patent and Trademark
Office, Commissioner for Patents, P.O. Box 1450,
Alexandria, VA 22313-1450; call toll-free at 1-800-PTO-9199;
or visit www.uspto.gov.
For more information about the Disclosure Document
Program, Provisional Applications or Non-provisional
Applications call 1-800-PTO-9199. In addition, every
state has a Patent and Trademark Depository Library
that maintains collections of current and previously-issued
patents and Patent and Trademark reference materials.
To order a copy of the American Inventors Protection
Act, call 1-800-PTO-9199, or visit www.uspto.gov/web/offices/com/speeches/s1948gb1.pdf.
- National Congress of Inventor Organizations
NCIO offers free articles, information,
resources, and an online magazine America's
Inventor Online. To contact NCIO, call
toll-free 1-877-807-4074, or visit www.inventionconvention.com/ncio.
- United Inventors Association
UIA offers free articles, information,
resources, referrals to local support groups for
inventors, and online copies of its newsletter.
To contact UIA, call 1-585-359-9310, or visit www.uiausa.com
or www.uiausa.org.
- Federal Trade Commission
(FTC)
Produced in
cooperation with the U.S. Patent and Trademark Office
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