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Promotion Firms

What to watch out for when dealing with invention promotion companies.

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Promotion Firms
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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. 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 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

  1. few inventions ever make it to the marketplace
  2. getting a patent doesn't necessarily increase the chances of commercial success.
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, the Internet, newspapers, and magazines. These ads target independent inventors with offers of free information on how to patent and market their inventions.

Possible Sales Tactics

If you respond to the ads, which may urge you to call a toll-free number, 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.

After the preliminary review, a firm might tell you it needs to do a market evaluation of your idea for a fee. 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 additional invention promotion and marketing services. Fraudulent firms don't offer an honest appraisal of the merit, technical feasibility, or market potential of an invention.

Real Connections?

Promotion firms may claim to know or have special access to manufacturers who are likely to be interested in licensing your invention or 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.

Reputable licensing agents usually don't rely on large advance fees. Rather, they depend on royalties from the successful licensing of client inventions. How do 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 and charges you huge fees in advance, take your business elsewhere.

Heads Up

If you're interested in working with an invention promotion firm, here's information that can help you avoid making a costly mistake.

  • Many fraudulent invention promotion firms offer inventors services in a two-step process: one involves a research report or market evaluation of your idea that can cost you. The other involves patenting or marketing and licensing services, which can cost you mpre. Early in your discussion with a promotion firm, ask for the total cost of its services, from "research" to 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 $5,000 to $10,000. 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. In several states, disclosing the success rate is the law.

  • 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.

  • Unscrupulous firms often promise that they will exhibit your idea at tradeshows. Most invention promotion scam artists 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 U.S. Bureau of Standard Industrial Code (SIC). Lists of manufacturers that come from classifying your idea with the SIC usually are of limited value.

Common Sense Tips

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. See - Questions to Ask Before Doing Business

  • Investigate the company before you make any commitment. Call the Better Business Bureau, the consumer protection agency, and the Attorney General in your city or state, and in the city or state where the company is headquartered to find out if there are any unresolved consumer complaints about the firm.

  • Make sure your contract contains all the terms you agreed to—verbal and written—before you sign. If possible, ask an attorney to review the agreement.
Remember that once a dishonest company has your money, it's likely you'll never get it back.

For More Information

The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them.

Continue > It may be too good to be true if you hear

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