This information is reprinted from the Federal Trade Commission. To access this directly at the FTC site, click here.
Invention Promotion Firms
Think you have a great idea for a new product or service? You're not alone. Every year, tens of thousands of people try to develop their ideas and commercially market them.
Some people try to sell their idea or invention to a manufacturer that would market it and pay royalties. But finding a company to do that can be overwhelming. As an alternative, others use the services of an invention or patent promotion firm. Indeed, many inventors pay thousands of dollars to firms that promise to evaluate, develop, patent, and market inventions... and then do little or nothing for their fees.
Unscrupulous promoters take advantage of an inventor's enthusiasm for a new product or service. They not only urge inventors to patent their ideas or invention, but they also make false and exaggerated claims about the market potential of the invention. The facts are:
There's great satisfaction in developing a new product or service and in getting a patent. But when it comes to determinig market potential, inventors should proceed with caution as they try to avoid falling for the sweet-sounding promises of a fraudulent promotion firm.
Using Patent or Invention Promotion Firms
Advertisements for invention promotion firms are on television, radio and the Internet, and in newspapers and magazines. These ads target independent inventors with offers of free information on how to patent and market their inventions. Often, however, the information is about the promoter.
If you respond to the ads&emdash;which may urge you to call a toll-free number&emdash;you may hear back from a salesperson who will ask for a sketch of the invention and information about your idea and you. As an inducement, a firm may offer to do a free preliminary review of your invention.
Some invention promotion firms may claim to know or have special access to manufacturers who are likely to be interested in licensing your invention. In addition, some firms may claim to represent manufacturers on the look-out for new product ideas. Ask for proof before you sign a contract with any invention promotion firm that claims special relationships with manufacturers.
After giving your invention a preliminary review, a firm might tell you it needs to do a market evaluation of your idea&emdash;for a fee that can be several hundred dollars. Many questionable firms don't do any genuine research or market evaluations. The "research" is bogus, and the "positive" reports are mass produced in an effort to sell clients on additional invention promotion and marketing services. Fraudulent invention promotion firms don't offer an honest appraisal of the merit, technical feasibility, or market potential of an invention.
Some invention promotion firms also may offer a contract in which they agree to help you market and license your invention to manufacturers. Unscrupulous promoters may require you to pay a fee of several thousand dollars in advance. Reputable licensing agents usually don't rely on large advance fees. Rather, they depend on royalties from the successful licensing of client inventions.
How can they make money when so few inventions achieve commercial success? They're choosy about which ideas or inventions they pursue. If a firm is enthusiastic about the market potential of your idea&emdash;but charges you a fee in advance&emdash;take your business elsewhere.
If you're interested in working with an invention promotion firm, here's information that can help you avoid making a costly mistake.
Common Sense Tips
For More Information
The Patent and Trademark Office offers information about patents, trademarks, and copyrights. Write to the U.S. Department of Commerce, Patent and Trademark Office, Washington, D.C. 20231; call toll-free at 1-800-PTO-9199. For more information about the Disclosure Document Program, call 703-308-4357. In addition, every state has a Patent and Trademark Depository Library that maintains collections of current and previously-issued patents and Patent and Trademark reference materials.
You can file a complaint with the FTC by contacting the Consumer Response Center by phone: toll free 877-FTC-HELP (382-4357); TDD: 202-326-2502; by mail: Consumer Response Center, Federal Trade Commission, 600 Pennsylvania Ave, NW, Washington, DC 20580; or through the Internet, using the online complaint form. Although the Commission cannot resolve individual problems for consumers, it can act against a company if it sees a pattern of possible law violations.
The FTC publishes free brochures on many consumer issues. For a complete list of publications, write for Best Sellers, Consumer Response Center, Federal Trade Commission, 600 Pennsylvania Ave, NW, Washington, D.C. 20580; or call toll free (877) FTC-HELP (382-4357), TDD (202) 326-2502.
Finally, you may contact the National Congress of Inventor Organizations toll-free at 1-888-695-4455.