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How to Avoid an Invention Company Scam

By: Dan Lockton - Updated: 27 Aug 2012 | comments*Discuss
 
Invention Inventor Inventing Promotion

Many inventors pouring their heart, soul and livelihoods into their inventions, have been easy prey for ‘invention promotion’ companies which may offer little of tangible benefit in return for upfront fees. This article aims to help you avoid the sharks and charlatans, and make the best use of your time (and money) in bringing your invention to market.

Types of Invention Scam

The usual form taken by an invention promotion company operation, often advertising on late-night television, is to offer to research the market for your invention, and promote it to manufacturers, in return for a fee. Done correctly, this sort of work would be of great benefit to an inventor, but most operations of this kind result in severe disappointment.

The research may be very cursory or poorly applicable — little better than anyone with access to the internet or a public library could do within minutes — and the promotion may consist merely of blind mailshots to lists of companies out of industrial catalogues, with understandably poor results. Fees range from hundreds to thousands of pounds, and will usually be ‘staged’ — probably with a ‘free’ initial consultation — leading the inventor into a cycle of increasing payments. High-pressure selling techniques scare inventors into rushing decisions.

Some companies go further and offer to handle patenting and licensing as part of a ‘we do it all’ package. This can be especially deleterious for the inventor, as many of the ‘patents’ secured are in fact US design patents, covering solely the external appearance of a product (similarly to a registered design in the UK) and offering no protection of the functionality. Equally, a poorly researched ‘patentability study’ can trick the inventor into proceeding with patenting (and all the costs and time incurred) mistakenly.

Many companies will also use lists of inventors’ names and addresses — publicly available by monitoring new patent applications — to target inventors directly, perhaps even tailoring the approach based on the title of the patent application. The same caveats apply: be careful.

Other Forms of Invention Promotion

Not all companies claiming to help inventors are scams, but understandably, the field’s reputation is tarnished by the activities of the least scrupulous operations, and it can be difficult for an inventor to know where to turn.

As a high-profile British inventor, Trevor Baylis set up an initiative aiming to provide a transparent and honest appraisal of inventions, their patentability and commercial potential, and assist with finding manufacturers and licensees. The focus is on being honest about the potential of the inventions, and as such the percentage of inventors who are told that their invention is not worth proceeding with is high, compared with many typical promotion companies who will lure inventors with fantastic suggestions of how successful their invention could be.

Equally, there are companies which will offer to find manufacturers and buyers for your invention, paying you royalties on sales in return for you paying for the invention’s development into a manufacturable product. Whilst there may be some merit in this, it is always wise to check very carefully into the company’s background and track record. Talk to the manufacturers and retailers with whom the companies claim to have relationships. Talk to other inventors who have dealt with the companies.

What to Look for

So, what should you look out for? Your first move should be to investigate any company thoroughly. Do not send any details of your invention, or sign any agreements, before doing your research.

Reports from dissatisfied customers will be easy to find via the internet — for example, searching for the name of a major US invention ‘services’ company which frequently advertises in Google ads reveals a number of dubious stories, court cases and so on. That should be enough to put you off straight away.

However, many companies will change names to escape the lingering reputation from their former incarnations; you need to dig more deeply. If the company is genuine, it will be only too happy to answer your questions:

  • Ask what actual successes these companies have had. Demand details of the products, where they are sold, in what quantities, and the inventors’ contact details. Licence agreements without actual sales are worthless.

  • Contact the inventors and discuss the company: have any of those inventors made an overall financial gain from the invention? To what extent was the promotion company actually involved?

  • Ask how many inventions the company has assessed/promoted, and what percentage of inventors’ approaches were rejected. A high rejection rate suggests a higher standard of analysis.

  • Ask for up-front prices for every aspect of the process on offer.

  • Check with the Chartered Institute of Patent Agents whether any of the company’s patent ‘experts’ are members.

If There is any Hesitation, Walk Away

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