Kenneth Avila, Esq. - Patents, Trademarks, and Business Law
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Beware of Invention Promotion Scams!

10/28/2017

4 Comments

 
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Do you want to save yourself $10,000?  That is about how much you will be paying those "invention assistance companies" you see on TV.  Be very careful when dealing with them and the promises they make.  I have read a number of agreements offered by these companies to inventors and all of them have many terms that are not in favor of the inventor.  Yet every year many inventors will hand over thousands of their hard earned money to these "invention assistance companies" and get very little as a result.  So what should you be looking for when you approach one of these companies?  I would say body armor, but seriously here are some pointers:

  1. Offers of a free review of your invention.  What did you mother tell you about free things in life?  Listen to your mother.  "Free" is their hook to bring you in contact with their professional sales person who will then do what professional sales people do - make a nice commission off of you.
  2. Market evaluation report.  The first thing their professional sales person will do is tell you that a market evaluation report needs to be performed.  Very likely that report will indicate that the market potential for your invention is great.  Of course their market evaluation report will say that because it is a lead in for the big dollar items that come next.  The purpose of the report is to get you excited enough to take the plunge.
  3. "Poor Man's Patent".  Some of these companies will tell you to protect your idea by writing it down, putting it into an envelope, mailing the envelope to yourself, and then not opening it.  You will gain no legal protection by this process and your idea remains open to copycats who see it.
  4. Agreements.  Once they have excited you with their market evaluation report they will offer you marketing services with brochures, TV ads, and phone banks.  But they will need to get you to sign an agreement first.  The agreement is key because the agreement will protect the invention assistance company from being sued by you!  Always have an attorney review the agreement and explain the risks you are taking by signing the agreement.

Because of the number of inventors being taken by invention assistance companies the US government has written 35 USC 297 to protect inventors.  35 USC 297 is nice but it is best to talk with an attorney first before signing the agreement.  

35 USC 297 allows you to ask the invention promoter the following:
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  1. The total number of inventions evaluated by the invention promoter for commercial potential in the past five years, the number of those inventions that received positive evaluations, and the number of those inventions that received negative evaluations.
  2. The total number of customers who have contracted with the invention promoter in the past five years, excluding those who have purchased trade show services, research, advertising, or other non-marketing services from the invention promoter, or who have defaulted in their payment to the invention promoter.
  3. The total number of customers known by the invention promoter to have received a net financial profit as a direct result of the invention promotion services provided by the invention promoter.
  4. The total number of customers known by the invention promoter to have received license agreements for their inventions as a direct result of the invention promotion services provided by the invention promoter.
  5. The names and addresses of all previous invention promotion companies with which the invention promoter or its officers have collectively or individually been affiliated in the previous 10 years.

Finally an attorney has certain ethical duties owed to their inventors.  An invention promotion company owes no such ethical duties.  An attorney who breaches their ethical duties to a client may lose their license to practice law in their state and to represent inventors before the patent office.  Those licenses are very hard to get and represents years of hard work in school.

4 Comments

FTC Warnings on Invention Promotion Firms

2/10/2016

0 Comments

 
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You see them on TV advertising services to promote and protect your new idea so that you can leave you current place of employment and move to Tahiti.  Remember that these firms do not hold any ethical duty to you as patent attorneys do.  If a patent attorney breaches their ethical duty to you it may mean a loss of their license and their income.  It takes years of study to become a patent attorney and to lose it all over unethical dealings is just not worth it.  However it is a far different story for Invention Promotion Firms and their craftily worded contracts that you will be signing.  Click here to see a great article at the Federal Trade Commission's website providing some guidance when dealing with these firms.  Click here to see more articles on this topic here on my website.

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  • Home
  • Meet the Lawyer
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    • Business Law
    • Intellectual Property Law >
      • Patent FAQ and Fees
      • Trademark FAQ and Fees
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    • IP Twitter Feeds
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