If you watch TV, listen to the radio, or read magazines, chances are you have seen advertising for companies offering to help first time inventors take their products to market. Often, these advertising materials promise patent protection, manufacturing assistance, and effective promotion in the relevant market for an invention. In many situations, these promises are not all they appear to be. If you have an idea for a new product or process, look over the following information to ensure that you receive the help you need when deciding how to bring your idea to life.
Invention promotion companies will attempt to gain new clients by flaunting success stories in their advertising or on their websites. Unfortunately, it appears that it is much more likely to have an “un-success” story with these companies. News outlets across the country have covered the stories of inventors who have been less than satisfied with invention promotion companies.
Besides promoting their supposedly numerous success stories, invention promotion companies are notorious for several other sales tactics designed to build confidence in their services. First, these companies will assure prospective clients that their invention is sure to be “the next big thing.” They will assure prospective clients that there is a market for their products, sometimes offering a market survey/market report for a charge of anywhere between $100 and $500. Additionally, salespeople at these companies will be vague about the total cost of their services and provide contract language that is generally quite sparse. Low upfront fees can lead prospective clients to assume they are getting a deal on promotion or patent services, only to receive a bill later for a much higher cost.
Before signing a contract or paying any sum of money to an invention promotion company, you should be aware of what legal rights you have. The United States Patent and Trademark Office (USPTO) has published materials outlining the warning signs of invention promotion scams and what information a company is required to disclose to you before they enter into a contract with you. Under federal law, an invention promotion company has a duty to disclose, in writing, to a customer, the following information:
- 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;
- 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;
- 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;
- 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; and
- 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.
The same law provides that an invention promoter found to have injured a customer by materially false or fraudulent statements could be liable for any damages suffered by the customer or statutory damages of up to $5,000, in addition to reasonable costs and attorneys’ fees.
Additionally, it is always a good idea to do preliminary research on a company before entering into a contract with them. There are multiple places where you can get information regarding a company and their reputation in the marketplace. Start with the Federal Trade Commission (FTC). There, you can conduct a search to determine if the company has ever been investigated or fined by the FTC. You can also check the USPTO’s Published Complaints website to look for any complaints regarding the company. Finally, you can consult the Better Business Bureau or Chamber of Commerce in your area for any information they may have.
A registered patent and trademark attorney will always be the best place to start when it comes to legal protection for your new invention. A patent attorney can assist you in the complicated process of filing for patent protection and they can provide you with sound legal and business advice for the future.
If you have already entered into business with an invention promotion company, a patent attorney can still provide you with advice and assistance. If you have any questions regarding your intellectual property, please reach out to Jordan Meggison-Decker or another attorney on our BrownWinick Intellectual Property team. We are here to offer trusted legal advice and add value to any transaction, including those with complex and novel issues.
