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 brochure 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 and assistance.
How to Identify Legitimate Firms
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.
Advertising and Sales Techniques
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 Licensing Contract
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
How to Protect Yourself
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 to answer.
* 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
* 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
* 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 organizations.
* Beware of high-pressure sales tactics.
* 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
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 Assn of the United States of America (UIA-USA)
P.O. Box 50305
St. Louis, Missouri 63105
(stamped, self-addressed envelope required)
National Congress of Inventor Organizations (NCIO)
727 North 600 West
Logan, Utah 84321
Minnesota Inventors Congress
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: Correspondence
Branch, 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
Facts for Consumers from the Federal Trade Commission
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