So, you think you have a hot idea for a new cup - one that's as durable and heat resistant as Styrofoam but more biodegradable than paper. If you think you have an invention with potential, you're not alone. Each year, people by the thousands try to develop and mold their ideas into commercial success. How do you turn your simple idea into a multi-million dollar business?
Many inventors have turned to invention submission and idea promotion companies which promise service - they say they'll evaluate your invention, research the patent and contact manufacturers on your behalf. Unfortunately, many companies that claim to help inventors develop and market their ideas have been under investigation for fraud by the Federal Trade Commission (FTC) and other government agencies. In fact, the U.S. Patent Office estimates that inventors stand to lose close to $300 million each year. How do you protect your invention and your wallet from fraudulent invention promotion companies?
Before Dialing That Toll-Free Number...
Invention promotion companies usually advertise on television, many times in the late night or early morning hours. Before calling that 1-800 number flashing on your television screen, consider the following real-life examples. Hopefully they'll persuade you to do some research before opening your wallet to an invention promotion company:
FTC Targets Invention Submission Companies
More than ten years ago, the FTC began taking legal action against invention firms, beginning with a 1994 settlement with ISC. In that deal, ISC agreed to pay $1.2 million to former consumers without admitting to any wrongdoing. The FTC charged that the company made several misrepresentations to consumers while persuading them to pay fees ranging from $395 to $4,890. Since then, the FTC has sued at least four other inventor submission companies, requiring them to pay customers hundreds of thousands of dollars, as well as millions of dollars in fines.
Don't Fall for Flattery
We're all vulnerable to flattery, inventors are no different. Who doesn't want to hear that they've invented the next big thing and are about to become rich beyond belief? The important thing to remember when soliciting inventor promotion companies is, if it sounds too good to be true, it probably is.
Many fraudulent invention promotion firms offer inventors a research report or market evaluation of their idea that can cost hundreds of dollars. Once the research is completed, they offer patenting or marketing and licensing services, which can cost several thousand dollars. If you are thinking about contacting a promotion firm, the first question you should ask is for the total cost of its services. Legitimate companies will have relatively small, if any, upfront fees because they make their money from successful royalty arrangements from the inventions they accept. If they do have upfront fees, reputable companies will tell you all of the out-of-pocket costs right away, before a relationship is solidified.
The American Inventors Protection Act of 1999 gives you certain rights when dealing with invention promoters. Before an invention promoter can enter into a contract with you, it must disclose the following information about its business practices during the past five years:
Finding Additional Information
The smartest way to make sure you're using a legitimate company to promote your idea is to do research.Find out if the company was ever investigated or in trouble with the FTC, Better Business Bureau or any other consumer protection agency. This may be a good sign as to whether or not the company is reputable.