Beware of Invention Submission Firms
An entrepreneur recently came to the SBDC for help after becoming the victim of an Invention Submission Firm, paying almost $10,000 for a “market evaluation and commercialization plan” that turned out to be worth only slightly more that the glossy paper it was printed on…
An invention submission firm is a company that provides high cost, low value market research and product development and product promotion, with little work being performed by the client, and less by the firm. After a low-cost introductory offer of only $700 up front, they told the client that the product idea was “great”, “had fantastic market potential”, and that for the low price of $9,000 they would help them get it licensed by a major consumer products company.
You can use resources such as the Better Business Bureau, Federal Trade Commission, and the U.S. Patent and Trademark Office, to assess the credibility of these invention submission, development, and promotion companies.
You may think from the web sites or the late night TV ads for some of these companies, “Hey, they must be legit- they’ve got lab coats” but in one example, the BBB reports 191 complaints filed in the last 3 years against one prominent Invention Submission firm.
The American Inventors Protection Act of 1999 gives a consumer the right to the following information before signing a contract with an invention promoter:
(1) The total number of inventions evaluated by the invention promoter for commercial potential in the past 5 years, as well as 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 5 years, not including customers who have purchased trade show services, research, advertising, or other nonmarketing 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 such invention promoter
For example, one prominent firm has had 44,035 customers since 1989, with the number who received a net financial profit being 13… or a success rate of merely .02%
(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 such 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
More on Invention Scams from the United States Patent and Trademark Office (USPTO)
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