You may have a great
idea for a new product or service, but a great idea is not enough. You
need to know how to develop and market it commercially. You could try
to sell your idea or invention to a manufacturer who would market it and
pay you royalties.
But finding such a
company could be an overwhelming task. You also could consider using the
services of an invention promotion firm. Some invention promotion firms
may help you get your idea or invention into the marketplace. But be aware,
some inventors have paid thousands of dollars to firms that promised to
evaluate, develop, patent, and market inventions and got nothing for their
So be cautious. Your
enthusiasm for your idea may make you vulnerable to promoters who make
false or exaggerated claims about the market potential of your invention.
This guide tells you how to spot some common signs of trouble, how to
protect yourself, and what to do if you become a victim. It also lists
government agencies and private organizations that offer additional information
How to Identify
Often, it is difficult
to distinguish between a fraudulent invention promotion firm and a legitimate
one. This may be because unscrupulous and honest firms often use many
similar advertising and sales techniques, market evaluations, and contract
strategies. However, there are some comparisons made in the next three
sections that may help you identify legitimate companies.
Some invention promotion
firms advertise through television and radio, and classified ads in newspapers
and magazines. They target independent inventors, frequently offering
free information to help them patent and market inventions. They also
may advertise a toll-free "800" telephone number that inventors
can call for written information. However, the information may consist
only of brochures about the promoter.
If you respond to
the ads, you may hear from a salesperson who will ask for information
about yourself, your idea, and a sketch of the invention. As an inducement,
the firm may offer to do a free preliminary review of your invention.
Also, some invention
promotion firms may claim to know or have special access to manufacturers
who are likely to be interested in licensing your invention. Further,
some promotion firms may claim to have been retained by manufacturers
who are looking for new product ideas. These kinds of claims often can
be false or exaggerated. Therefore, before signing a contract with an
invention promotion firm who claims special relationships with appropriate
manufacturers, ask for some proof.
A Market Evaluation
After giving your
invention a preliminary review, a firm might tell you it needs to do a
market evaluation on your idea, which may cost several hundred dollars.
Such reports from questionable firms often make vague and general statements
and provide no hard evidence that there is a consumer market for your
invention. Reputable company reports, on the other hand, deal with specifics.
Before you pay for a report on your idea, ask what specific information
you will receive.
A Marketing and
Some invention promotion
firms also may offer you a contract where they agree to act as your exclusive
marketing and licensing agent. For this, a questionable firm may require
you to pay an upfront fee of as much as $10,000 and to commit a percentage
of the royalties the invention may earn. On the otherhand, reputable licensing
agents typically do not rely principally on large upfront fees. They normally
rely on royalties from the successful licensing of client inventions and
are very selective about which ideas and inventions they pursue. A request
for an upfront fee frequently is another distinguishing characteristic
of a questionable invention promotion company.
How to Protect
If you are interested in working with an invention promotion firm, consider
taking the following precautions before you sign a contract and pay significant
amounts of money.
Early in your discussions with a promotion firm, ask what the total cost
of its services will be. Consider it a warning if the salesperson hesitates
Be careful of an invention
promotion firm that offers to review or evaluate your invention but refuses
to disclose details concerning its criteria, system of review, and qualifications
of company evaluators. Without this information, you cannot assess the
competence of the firm or make meaningful comparisons with other firms.
Reputable firms should provide you with an objective evaluation of the
merit, technical feasibility, and commercial viability of your invention.
Require the firm to
check on existing invention patents. Because unscrupulous firms are willing
to promote virtually any idea or invention with no regard to its patentability,
they may unwittingly promote an idea for which someone already has a valid,
unexpired patent. This could mean that even if the promotional efforts
on your invention are successful, you may find yourself the subject of
a patent infringement lawsuit.
If no valid, unexpired
patent exists for your idea, seek advice from a patent professional before
authorizing the public disclosure of your idea.
Be wary of an invention
promotion firm that will not disclose its success and rejection rates.
Success rates show the number of clients who made more money from their
invention than they paid to the firm. Rejection rates reflect the percentage
of all ideas or inventions that were found unacceptable by the invention
promotion company. Check with your state and local consumer protection
officials to learn if invention promotion firms are required to disclose
their success and rejection rates in your locality.
In reality, few inventions make it to the marketplace and still fewer
become commercial successes. According to experts used in FTC cases, an
invention promotion firm that does not reject most of the inventions it
reviews may be unduly optimistic, if not dishonest, in its evaluations.
Be wary of a firm that claims to have special access to manufacturers
looking for new products, but refuses to document such claims. Legitimate
invention promotion firms substantiate their claims, which you can check.
Be skeptical of claims
and assurances that your invention will make money. No one can guarantee
your invention's success.
Avoid being taken
in solely on a firm's promotional brochures and affiliations with impressive-sounding
Beware of high-pressure
Investigate the company
before making any commitments. Call your Better Business Bureau, local
consumer protection agency, and Attorney General in your state and the
state in which the company is located to learn if they know of any unresolved
consumer complaints about the firm.
Make sure your contract
contains all agreed upon terms, written and verbal, before you sign. If
possible, have the agreement reviewed by an attorney.
If you do not get
satisfactory answers to all of your questions with an invention promotion
firm, consider whether you want to sign a contract. Once a dishonest company
has your money, it is unlikely you will ever get it back.
For More Information
A number of government
agencies and private organizations offer publications and assistance to
independent inventors. You can call the U.S. Patent and Trademark Office
at (703) 557-4636 and the U.S. Small Business Administration (SBA) at
1-(800)-827-5722 for publications about inventions.
You also may want
to call your SBA district office to learn about services available through
the Small Business Development Centers program. Inventor's clubs, associations,
and innovation centers also can be valuable sources of information and
services. For their locations contact the following organizations:
United Inventors Association
of the United States of America (UIA-USA)
P.O. Box 50305
St. Louis, Missouri 63105
(stamped, self-addressed envelope required)
of Inventor Organizations (NCIO)
727 North 600 West
Logan, Utah 84321
P.O. Box 71
Redwood Falls, Minnesota 56283-0071
What to Do If You
Are a Victim
If you believe you
are a victim of a fraudulent invention promotion, first contact the firm
and try to get your money back. If you are unsuccessful, report your problem
to your Better Business Bureau, local consumer protection agency, and
the Attorney General in your state and in the state where the company
is located. Your information may help an ongoing investigation or demonstrate
the need for one.
You also may file
a complaint with the FTC by writing:
Federal Trade Commission, Washington, D.C. 20580.
The FTC generally
does not intervene in individual disputes. However, the information you
provide may indicate a pattern of possible law violations.