Dishonest invention promoters lie about the profit potential of your invention to get you to pay for expensive, but often useless, services. Here’s what you need to know to avoid an invention promotion scam.
- Get information. Federal law gives you the right to get information about an invention promotion firm’s operations and clients before you sign a contract. The firm must give you information about the past five years, including:
- how many inventions it evaluated
- how many of those inventions got positive or negative evaluations
- the total number of clients it served
- how many of those clients ended up with a net profit after using the firm’s services
- how many of those clients licensed their inventions through the firm’s services
- Check for complaints. To see if there are any complaints against the firm you’re thinking about working with, start with your local consumer protection agency and the attorney general in your state, as well as in the state or city where the invention promotion company is headquartered. Check out the list of complaints against invention promoters published by the U.S. Patent and Trademark Office (USPTO) and search the FTC’s website for past cases — go to ftc.gov and search for the word “invention.”
- Check out online reviews to see what others think. Search online with the name of the promotion firm or the representative you’re dealing with, plus words like “review,” “scam,” or “complaint.” But know that some dishonest companies post fake reviews or may threaten to sue former clients with baseless — but intimidating — charges like extortion or defamation if they post negative reviews, so people might be less likely to post them. See How to Evaluate Online Reviews for more information.
- Verify references. Ask for the names of many previous clients. Pick and choose who to call — don’t rely on the promotor to give you particular names — and ask about their experiences. For example, did the promotion firm follow through with its promises? Were former clients satisfied with the firm’s marketing services?
- Get the total cost of services before you sign up. Many invention promotion firms offer at least these two services:
- A research report or market evaluation that usually includes information on who your customers are, where they’re located, who are competitors, and other details that give you a view of the marketability of your invention.
- Patenting and licensing services that may make it easier for you to navigate these processes.
Ask for the total cost of the firm’s services early on — including research, marketing, and licensing. Walk away if the salesperson refuses to tell you.
- Don’t pay in advance. Dishonest promoters might say you have to pay several thousand dollars upfront. But reputable invention promotion firms usually don’t rely on large upfront fees. Instead, they depend on the royalties they earn by successfully licensing their clients’ inventions. If a firm is enthusiastic about the market potential of your idea — but wants to charge you a large fee in advance — take your business (and your idea) elsewhere.
- Find out exactly how they’ll do market research. Will the firm do it themselves, or will they hire a market research expert? Questionable firms often don’t do any genuine research or market evaluations. Instead, they’ll give you a “positive” report that’s mass-produced and designed to sell you more services.
- Remember: no one can guarantee your invention’s success. Shady invention promotion firms will tell inventors that their ideas are among the relative few that have market potential. The truth is that most ideas don’t make any money.
- Don’t believe promises of a “global” patent. In the United States, patents are issued by the USPTO, usually for 20 years, and require maintenance fees. Sometimes promoters will tell you that their fees will cover the cost of getting a “global patent” from the USPTO that’s valid anywhere in the world. But there’s no such a thing as a global patent. U.S. patents are effective only in the U.S. and U.S. territories, but have no effect abroad. You must apply for patents in each country where you want patent protection.
- Get promises in writing. Before you sign a contract with an invention promotion firm, make sure it contains all the terms you agreed to — including any verbal promises. Often, the salesperson says one thing, but the contract says something quite different. If possible, ask an attorney to review the agreement.