Hiring Invention Marketing. Invention promotion companies abound, but can be costly and frustrating option for many inventors. Some may promise to take most of their fees in a percentage of royalties made on the invention. The point to remember is that it is rare for any such firm to take all its fees out of royalties. A Federal Trade Commission publication states, “Indeed, many inventors pay thousands of dollars to firms that promise to evaluate, develop, patent, and market inventions. Unfortunately, many of these firms do little or nothing for their fee.”

Be Cautious. Caution is the watchword. It is quite common to hear about a promotion company’s excitement and the great potential of your invention before your make your payment. However, it is also common to hear an inventor complaint, “They took my money and didn’t provide any valuable service in return.” After payment of a substantial fee, inventors are sometimes provided “feasibility reports” or documentation that may be of little practical use in actually marketing a specific invention. Many times the performance is a mixed bag of results, but still leaving a dissatisfied inventor at the end of the process. See “Spotting Sweet-Sounding Promises of Fraudulent Invention Promotion Firms,” from the Federal Trade Commission.

What the FTC Says. The Director of the Federal Trade Commission’s Bureau of Consumer Protection, at a July 1997 press conference announcing Project Mousetrap said, “Yet the fraudulent firms in this industry conclude, after a ‘professional’ evaluation, that virtually every new idea or product crossing their desks is patentable and has ‘tremendous market potential.’ They promise enthusiastic inventors that they can provide professional assistance in getting a patent and securing licensing and manufacturing agreements with manufacturers. Time after time, however, these firms lie to consumers about the sincerity of their belief in an idea and its marketability.” See the FTC’s discussion of Invention Promotion Firms.

The Design Patent Switch. The FTC says, “Unscrupulous invention promotion firms often apply for patents that provide such limited legal protection that it is easy for competitors to find a way to design around the patent.”  There are two different types of patents covering different things and each type offers different protection.  Don’t be fooled by a firm suggesting a less expensive design patent instead of a utility patent.  A utility patent grants exclusive rights relating to the utility or usefulness of an invention.  On the other hand a design patent grants such rights only with respect to the way an invention looks, that is its ornamental design, and not for its utility or usefulness.   See “What is Patentable?” on the Frequently Asked Question page of this web site.

Ask Questions. Under federal law, invention promoters must disclose in writing the number of positive and negative evaluations of inventions they have given over a five-year period. They must disclose how many inventions they have evaluated; how many of those inventions got positive or negative evaluations; their total number of customers; how many of those customers received a net profit from the promoter’s services; and how many of those customers have licensed their inventions due to the promoter’s services. The United States Patent and Trademark Office publishes a document listing the top ten scam warning signs. Because it comes from an authoritative source, I’ve made “Top Ten Scam Warning Signs” available (pdf document, ~350 kb).

You may not get a straight answer to your questions, but if it comes to a later charge of fraud, it may help to document their response as well as their promises. You might also ask if they have any guarantees to get your money back, if you don’t think the service lived up to expectations. However, you might guess what the answer will be. Other questions to ask may be found in the publication mentioned in the first paragraph, above.

Investigating the Reputation of a Company. If you are planning on engaging an invention promotion company, you should first investigate whether or not there are complaints against that company and see how they were resolved.

• Internet Search. The fastest and easiest method for examining an offer is to do an Internet search on the name of the company and/or individual your are dealing with. You can add the word “complaint” to limit the returns if you get too many. A number of search engines are listed at the bottom of this Law Firm’s Useful Links page.

• United States Patent and Trademark Office. The United States Patent and Trademark Office provides scam prevention information and other resources. The Patent Office accepts complaints filed against invention promoters/promotion firms and forwards these complaints to the invention promoters/promotion firms for response. Both the complaints and the responses are published in this public forum. Unpublished complaints filed with the United States Patent and Trademark Office are available on InventorEd, Inc.’s web page.

• Federal Trade Commission. The United States Federal Trade Commission investigates deceptive invention promotion schemes and may file a complaint if there is a pattern of violations. Essentially, this means that there has to be more than a small number of complaints. The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest.

• FTC Typical Allegations. A typical Federal Trade Commission complaint would find that an invention promotion company made false claims, or failed to disclose key information in the course of inducing consumers to purchase patenting, marketing and commercialization services. A Federal Trade Commission complaint is not a finding or ruling that the defendant has actually violated the law. Rather, a federal district court decides the case. When a complaint is filed, it is common for the Federal Trade Commission to request a court order freezing assets and requiring the preservation of documents of defendants. So it is not a minor event for such a company to face a Federal Trade Commission complaint.

• FTC Court Cases. You can look at the summaries of Federal Trade Commission cases and other interesting items if you visit the Federal Trade Commission search site and type in the word “invention”. You might also try typing in the name of the company you are researching.

• Publication: Invention Promotion Firms. Right click on the following link and save it to your computer: It is a Federal Trade Commission pdf document titled “Invention Promotion Firms.” It offers tips for consumers who are considering trying to patent and commercialize their inventions.  See also FTC’s “Facts for Consumers.“

• Better Business Bureau. Search the Better Business Bureau in the hometown of the company.  It may offer some information about complaints they have received about an invention promotion company.

• State and Local Government. The state(s) and local government(s) where the company has its office(s) may also be a good source of complaint information on that company. That state may have a consumer protection agency. If not, the Attorney General in that state, or chief legal officer in the local government where the company is headquartered is a good place to call or send an email. This takes a bit of sleuthing, but it this could be a large investment for you. A little effort at the front end of the process could save a lot of heartache and cost at the back end of the process.

Getting Your Money Back. An inventor might seek to get his money back from that promotion firm that did not live up to his expectations. However, this is easier said than done. Once you part with your money, attempting to get it back may be a long and arduous task. After a respectful exchange with such a company and finding no measurable success in getting money back, your last, low-cost steps may be making complaints to the United States Patent and Trademark Office and the Federal Trade Commission.