Invention Promotion Firms

Many inventors pay thousands of pounds 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:

Few inventions ever make it to the marketplace; and
Getting a patent doesn't necessarily increase the chances of commercial success.

There's great satisfaction in developing a new product or service and in getting a patent. But when it comes to determining 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.

If you respond to the ads 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—for a fee that can be several hundred pounds. 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 thousands of pounds 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—but charges you a fee in advance—take your business elsewhere.

Points to look out for

If you're interested in working with an invention promotion firm, make sure you carry out due diligence re company checks on them before considering anything.

Many fraudulent invention promotion firms offer inventors two services in a two-step process: one involves a research report or market evaluation of your idea that can cost you hundreds of pounds.

The other involves patenting or marketing and licensing services, which can cost you several thousand pounds. Early in your discussion with a promotion firm, ask for the total cost of its services, from the "research" about your invention through the marketing and licensing. Walk away if the salesperson hesitates to answer.

Many fraudulent companies offer to provide invention assistance or marketing services in exchange for advance fees that can range from £2,500 to £5,000. Reputable licensing agents rarely rely on large upfront fees.

Unscrupulous invention promotion firms tell all inventors that their ideas are among the relative few that have market potential. The truth is that most ideas don't make any money.

Many questionable invention promotion firms claim to have a great record licensing their clients' inventions successfully. Ask the firm to disclose its success rate, as well as the names and telephone numbers of their recent clients. Success rates show the number of clients who made more money from their inventions than they paid to the firm. Check the references thoroughly.

Ask an invention promotion firm for its rejection rate—the percentage of all ideas or inventions that the invention promotion firm finds unacceptable. Legitimate firms generally have high rejection rates.

Fraudulent invention promotion firms may promise to register your idea with the Patent and Trademark Office's. Many scam companies charge high fees to do this. The cost of filing a patent is £10 and registers to protect your ideas cost nothing

Unscrupulous firms often promise that they will exhibit your idea at tradeshows. Most invention promotion scams don't go to these tradeshows, much less market your idea effectively.

Many unscrupulous firms agree in their contracts to identify manufacturers by coding your idea with the Standard Industrial Classification codes (SIC). Lists of manufacturers that come from classifying your idea with the SIC are of limited value and can be compiled for free at your local library..

Common Sense

Contracting for the services of an invention promotion firm is no different from making many other major purchases. Apply the same common sense.
Question claims and assurances that your invention will make money. No one can guarantee your invention's success.

Here is a list of questions you will need answered.

If you decide to use the services of a promoter or promotion firm, keep in mind that the firm should disclose specific information to you regarding their past business practices. Specifically, before a contract can be established between you and the firm, get the firm to disclose to you in writing each of the following items of information:

(1) The total number of inventions evaluated by the promoter for commercial potential in the past 5 years, as well as the number of those that received positive evaluations, and the number of those that received negative evaluations
In other words, how much experience does the promoter have? What is their track record? Do they generally give mostly positive or negative evaluations, or is there a balance between their positive and negative evaluation history?

(2) The total number of customers who have contracted with the promoter in the past 5 years, not including customers who have purchased trade show services, research, advertising, or other non marketing services from the invention promoter, or who have defaulted in their payment to the invention promoter
This information will give you an idea of just how experienced the promoter or firm is and the volume of services they provide.

(3) The total number of customers known by the promoter to have received a net financial profit as a direct result of the services provided by such promoter
What financial impact, if any, has the promoter or firm actually made to its customers?

(4) The total number of customers known by the promoter to have received license agreements for their inventions as a direct result of the invention promotion services provided by such promoter

Like item (3) above, this information will also enable you to gauge the effectiveness of the firm in evaluating its direct impact on its customers.
Note the key words in the last two requirements--"…as a direct result of the invention promotion services provided by such invention promoter". Be aware that just because a license agreement was eventually secured for a given invention does not necessarily mean that it was a "direct result" of the promotion activities of the firm.

(5) The names and addresses of all previous invention promotion companies with which the promoter or its officers have collectively or individually been affiliated in the previous 10 years
This information will help you to know the history of the promoter or firm, even if the promoter changes firms or the firm changes its name.

UK Patent Office Advice

Do your homework - there is a considerable amount of free or low cost advice available, on issues such as patenting and other forms of intellectual property protection, which you may wish to consider first.

Do not disclose the details of your invention to anyone, including the promoter, without a prior confidentiality agreement - failure to do so could prevent you from obtaining intellectual property rights in the future.

Early in your discussion with a promotion firm, find out exactly what the different stages of the service are and the costs associated with each stage, from the "research" about your invention right through to the marketing and licensing.

Ask the firm to provide evidence that they have the necessary skills and expertise in the field of your interest to support the activities that they agree to carry out on your behalf.

Ask what success rate the firm has achieved in promoting inventions since it started offering its services, and find out whether references can be provided from recent clients.

Question claims and assurances that your invention will make money. Commercialisation of inventions is a risky business - no one can guarantee that your invention will be commercially successful.

Ask them for their rejection rate - the percentage of all ideas or inventions that the invention firm finds unacceptable at the first assessment stage. Not all ideas could be considered to be commercially viable and it should be expected that firms should have high rejection rates.

Find out whether the services advertised, e.g. the patent search and/or market assessment, will be carried out in the countries in which you would like to exploit your invention.

If the invention promotion firm claims to know, or have special access to, manufacturers who are likely to be interested in licensing your invention, or if they claim to represent manufacturers on the look-out for new product ideas - ask for proof.

If the firm offers the services of a "patent agent" or "patent attorney" ask if those people are registered. The Chartered Institute of Patent Agents (CIPA) is the professional body for patent agents in the UK. It aims to increase awareness and understanding of the innovation process by providing a basic information pack and free clinics, and by arranging talks or seminars when appropriate. CIPA members help inventors to obtain protection, not only in patents, but also in trade marks, designs and copyright. Call CIPA on +44 (0)20 7405 9450, or visit the web site at http://www.cipa.org.uk

If the firm offers search services to assess patent prospects make sure that the search is comprehensive and covers all published prior art. A patent must be new and if the idea is published anywhere in the world before filing then this will invalidate rights. Remember you can search Patents on the internet free of charge through official websites.

If at the end of all this you are happy with the evidence and do wish to enter into a contract, ensure that it contains all the terms you agreed to - verbal and written - before you sign. If possible you should seek legal advice.

The UK Patent Office Central Enquiry Unit +44 (0)1633 813930 (UK local rate number: 08459 500 505) are able to give advice about patenting and other forms of intellectual property protection. An extensive range of free literature is also available to individuals and small firms upon request.