© 2005 Dream Merchant Dream Merchant • 2309 Torrance Bvd. #104, Torrance, CA 90501 (310) 328-1925 email: Jkm316@aol.com HOW TO AVOID INVENTION SCAMS
Every Year, Thousands of Inventors Lose Money to Unscrupulous Invention Companies. Here's How to Avoid the Sharks.
By Mike Foley
While independent inventors are certainly some of the most creative people on the planet, they're often unaware of the dangers awaiting them in the marketplace. Although some invention submission companies are honest and truthful, many are not. And that spells potential trouble for new product developers.
Last year, American inventors were ripped off for millions of dollars (high-end estimates range over $200 million). And it's important to remember that these figures do not apply to corporate inventors, who rarely fall prey to such schemes. Instead, it's the independent inventors (like you) who can often lose a lifetime of savings to firms who exploit their dreams. That's a sad situation for those who are merely trying to make life better, while making a little money for themselves.
So what can you do to avoid such scams? The first step is to understand how these companies operate and how they draw unsuspecting inventors into the scheme. According to the Federal Trade Commission (FTC), which has thoroughly investigated the industry, the invention submission firms usually operate with a two-step method.
The initial step involves an offer for a free evaluation of the inventor's (your) idea. That may sound good, but it's important to note that the evaluation will most likely be favorable, easily drawing the inventor into the process. Armed with a favorable evaluation, inventors are then willing to spend money on a more comprehensive study of the idea, which often includes lengthy reports on technical and market feasibility, along with patent searches. Such reports are often "fill-in-the-blank," template studies that don't truly address the individual product. They do, however, hint at potential riches and inventors are often willing to pay hundreds of dollars for these reports.
With the inventor now firmly captivated, the companies move to the second step in the process, where patent and marketing issues are addressed. Such services now run the inventor thousands of dollars, while producing inferior patent protection and little in the way of marketing. The ultimate result? Thousands of dollars lost and nothing to show for it. The inventor is, in effect, back at square one, with far less operating capital.
The lesson here is that while an invention submission firm may seem like an easy solution, that may not be the case. So you'll still need to work the invention process with your eyes open, approaching such firms with great caution. In doing so, keep the following points in mind:
- 1. Total Cost--This should be discussed up front,
with figures offered in detail. Does the company hesitate to
provide a total figure? If so, walk away.
2. Company Success--How many of the company's clients have made more money than they have paid out in fees? If the figure is low, beware. In addition, be cautious if the company will not provide the names of a few satisfied customers you can talk with. These are standard questions that should be answered without hesitation.
3. Protection--How does the company handle patent protection and how much will it cost? Does the company company do patent searches and inform you if a similar patent already exists? The patent should be searched and applied for using a patent agent or attorney. Copying your idea on paper and mailing it to yourself DOES NOT OFFER LEGAL PROTECTION. If the company suggests this, walk away.
4. Company Location--You may notice that the company has more than one address, where, for example, the physical address and the mailing address are in different states. This is a big red flag you should investigate.
5. Relationships--Some companies will ask you to submit your idea to a particular manufacturer, even before you have a patent. They may even claim to have a special working relationship with that manufacturer. Be careful with such suggestions and ask for proof of the working relationship, address of the manufacturer and company representatives you can visit or talk with.
6. Pressure--If the company is "high pressure," calling you often and trying to force action, be suspicious and end the relationship.
7. Investigation--Check each firm through the Better Business Bureau in that state. If you feel you've already been ripped off, try contacting the firm for a refund. If that does not work, contact the Better Business Bureau and the Attorney General in that state. The FTC also takes complaints about invention submission firms.
The U.S. Patent and Trademark Office also has printed material for inventors that can help you avoid scam companies. Visit their website at: http://www.uspto.gov
Information is your best friend when taking your idea to the marketplace. Learn all you can before paying money for any invention services.
Mike Foley is a freelance writer who has edited The Dream Merchant since 1990. Mike offers a full range of writing and editing services, as well as online classes. You may contact him at: http://www.writers-review.com
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