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- Facts for Consumers About Invention
Promotion Firms
- 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 money.
- 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 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 company.
- 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 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 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 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)
- National Congress of Inventor Organizations (NCIO)
- 727 North 600 West
- Logan, Utah 84321
- (801) 753-0888
- Minnesota Inventors Congress
- P.O. Box 71
- Redwood Falls, Minnesota 56283-0071
- (507) 637-2344
- 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 violations.
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