Posted on February 25, 2010 by Vincent LoTempio

Invention Development: Taking Ideas from Concept to Production

What inventors need to know...

How does an inventor take a good idea and then develop it into a new product? Recently I asked this and other questions relating to invention development to the affable Justin Aielloforward thinking Justin Aiello. His company Aiello Designs takes ideas and turns them into reality. Here are a few questions and answers from the interview:

What do you do?

In general, I help independent inventors, start-ups and small companies take new ideas from concept to production. This includes Design, Engineering, Prototypes and Production Sourcing. I do not offer services with regards to funding, sales, marketing or licensing.

What makes an idea good or bad?

"I have seen great ideas fail and bad ideas succeed in the marketplace. What makes a successful product is good marketing, sales, design and manufacturing. What is right in one case is not necessarily right in another. You know you are right if it makes money and wrong if it doesn't."

How much information do you need to create a working prototype of product?

People come to me from all walks of life with different levels of expertise. Good ideas are not limited to the experts. Here are a few examples:

  • The inventor comes in with just the idea. The inventor recognizes a problem and does not have an answer. Our company figures out a solution and designs a product to solve the problem.
  • The inventor has a detailed drawing of a patented or patent pending product and we make a prototype.
  • The inventor has a prototype and we make additional refinements. The process of developing a prototype is an ongoing series of tests and refinements.
  • The inventor has a prototype completed without any need for refinements and we work out the mass manufacturing details.

How can the independent inventor with a new idea without "deep pockets" capitalize on a good idea?

I have found an independent inventor's path is somewhat limited:

  1. Manufacture and sell it through a buyer to a mass retailer. Here the inventor will likely need investors.
  2. Obtain a royalty agreement and license the rights to sell the product. Here, the inventor is in a better bargaining position if they possess a patented or patent pending product and a prototype.

"If you invented a new "Pet Nail Clipper" then go to the aisle in the pet store where they are selling these devices and investigate each one. Learn the names of 10-20 companies that will be able to produce, distribute and manufacture your product. Find out who in the company you need to talk to in order to sell your idea. Get yourself in the door with a patented or patent pending product and a prototype and then maybe you will make a deal."

How would you describe the ideal client/inventor candidate for product development?

  • 50+ years old, having the "entrepreneurial spirit."pet nail clipper
  • Has high disposable income.
  • Not risk adverse.
  • A person that can enjoy the process. Even if the product doesn't sell, they had fun with it.
  • Good business contacts. The inventor needs to understand one person cannot do everything. You need help with manufacturing, distribution and marketing. "An inventor who has an in at QVC or brother-in-law who is a buyer at WalMart has a better chance to succeed."
  • Good business sense:  a. Inventor knows where they want to go with a product;
                                                 b. There is a business plan to get there (road map); and
                                                 c. Knows when to call it quits. "Don't throw good money after bad."

 

What's the difference between an Invention Promotion Company and an Invention Development Company?

Invention development companies create and produce actual products. Invention promotion companies attempt to promote the idea to a manufacturer or retailer without actually manufacturing the product.

Clients that have come to me after they have been to an invention promotion company have said that they have paid invention promotion companies between $10,000 and $15,000 with little to show for it. Here are examples of what some promotion companies have provided:

  • sub par drawings of the product;
  • a template portfolio where the only thing that is different from client to client is the name of the product; and
  • a patent search and opinion of patentability.

What the inventor doesn't have when all is said and done is an actual deal with a product in production.

The truth is a small percent of inventors actually make money when working with invention promotion companies. I (Vincent LoTempio) searched the web and found the stats of two Invention Promotion Companies:

This was taken directly from the InventHelp website:

  • From 2007-2009, we signed Submission Agreements with 5,336 clients. As a result of our services, 86 clients have received license agreements for their products, and 27 clients have received more money than they paid us for these services.

This was taken directly from the Davison website:

  • The total number of consumers who submitted new product ideas to Davison during the past five years is five hundred seventy thousand seven hundred ninety eight (570,798).  The total number of consumers who purchased a Pre-Development Agreement or similar contract for research services is fifty thousand three hundred forty three (50,343)...The number of consumers who obtained a written license with a company that is not affiliated with Davison is three hundred forty one (341). The total number of consumers in the last five years who made more money in royalties than they paid, in total, under any and all agreements with Davison, is fourteen (14). The percentage of Davison's income that came from royalties paid on licenses of consumers' products is .001%.

Some other Aiello Designs

 

laser putter

 

heat gun

 

information kiosk

 
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Posted on January 24, 2010 by Vincent LoTempio

Inventors and Invention Promoters

What inventors need to know...

Clients have been asking me to write a blog post about companies providing invention promotion services and whether or not they can help inventors. I saw a law blog post today by IP Watchdog regarding a lawsuit filed by INVENTION SUBMISSION CORPORATION (dba Invent Help) in the United States Federal District Court for the Northern District of New York.

This case was filed against the corporate entity IP WATCHDOG INC and Eugene R. Quinn Jr. and Renee Quinn as individuals. Invent Help claims that their company has been irreparably injured by IP Watchdogs’ past false advertising, deceptive trade practices and defamatory portrayal of Invent Help and its inventor assistance services. One such example of alleged defamatory portrayal is stated in the complaint as:

"[IP Watchdog] state[s] that InventHelp's... invention submission model is to get inventors to spend large amounts of money for services of dubious quality."

Whether this particular invention promotion services company provides services of dubious quality or high quality in which an inventor can take advantage of is a question that may be argued in court. IP Watchdog blog stated, “Rest assured, I will vigorously defend [this case]." Remember the truth is an absolute defense in a defamation case. So are all his allegations true? Will we learn the truth? Will it go to trial? Cases like this are more likely to end in settlement.

I found an article written in 2004 by Bob Sullivan the technology correspondent for MSNBC.com entitled, "Got an invention? You, too, can be scammed" where he explored the vagaries of the invention industry and he told of how, FTC targeted this firm in the past, "

The Federal Trade Commission and various state authorities have taken several sweeping legal actions against invention firms, beginning with a 1994 settlement with Invention Submission Corp., one of the largest firms. In that deal, the firm agreed to pay $1.2 million to redress consumers without admitting to any wrongdoing."

The complaint is interesting because it essentially raises the same issues against IP Watchdog that have been raised against Invent Help in IP Watchdog's blog. Here's an excerpt from the complaint:

"[IP Watchdog] advertise and promote their competing inventor services on their blog in promotional pieces titled "Not All Invention Companies are Created Equal" and in a number of blog postings linked thereto including but not limited to "Beware Invent Help Press Releases","Avoiding Invent Help & Other Invention Scams", "My Position on Invent Help the UIA and Inventors Digest", "Quinn Resigns from UIA Over Invent Help concern", "How Inventors Can Avoid Scams, Traps and Raw Deals", "Falling Prey to Invention Submission Scams", and "No holes Barred: IPWatchdog Addresses Ethical Charges" as well as "Inventing" and a number of blog postings linked thereto. Each of these web pages features IP Watchdog's "Patent Pending Today" promotion of its Invent + Patent System. When the consumer clicks on the Defendants' promotion the consumer is taken to a IP Watchdog webpage explaining IP Watchdog's: a) Watchdog's: a) patentability search and opinion service and b) on-line service for generating a provisional patent application and instructions on "patent pending" submission to industry called the "Invent +Patent System."

Invent Help alleges that IP Watchdog draws people into his website by describing "scams" perpetrated by the invention submission companies. Invent Help further alleges that  "... IP Watchdog's invent + patent system allows [IP Watchdogs'] clients to submit 'inventions' that can be sold or licensed and that [IP Watchdog] can refer inventors to a 'reputable licensing and marketing company' who will do the licensing work that [Invent Help] claims to do rather than 'steal all of your money' like Plaintiff does." (see paragraph 25 of complaint).

If you go to the Invent Help web page entitled The Truth About InventHelp® - Avoid Invention Scams where they list FAQs about Spotting Inventor Fraud you will find they indicate "The law requires an invention company to give you an explanation of its track record in advance," while they say  "we're proud of our record and provide it to you in advance" they fail to list what their track record is on this page. I finally found it on a page entitled InventHelp® Client Invention Stories: Weed Thrasher, That was a curious place to put this nugget of information:

"From 2006-2008, we signed Submission Agreements with 5,692 clients. As a result of our services, 94 clients have received license agreements for their products, and 21 clients have received more money than they paid us for these services."

The law they are referring to is the The American Inventors Protection Act of 1999. This act established certain inventor rights rights when dealing with invention promoters. Before an invention promoter can enter into a contract with an inventor, it must disclose the following information about its business practices during the past five years:uspto

  • How many inventions it has evaluated;
  • How many of those inventions got positive or negative evaluations;
  • Its total number of customers;
  • How many of those customers received a net financial profit from the promoter's services; and
  • How many of those customers have licensed their inventions due to the promoter's services.

 

An inventor came into my office last week and said he searched online for an invention submission company to help market his new product. He said he shied away from the Davison company because of a court mandated disclosure statement on their web page which indicated:

"The total number of consumers in the last five years who made more money in royalties than they paid, in total, under any and all agreements with Davison, is fourteen (14). The percentage of Davison's income that came from royalties paid on licenses of consumers' products is .001%.."

Doesn't that number seem incredibly low to you? Is it because none of the inventions were good ideas? Or are the services provided of "dubious" quality?

There are few sources which instruct inventors about what they can do to protect themselves from scams. Here are some links to use as a starting point for an inventor to find information about how to deal with companies providing invention promotion services: 

  • The Ripoff Report enables anyone to exercise their first amendment right to freedom of speech online and report companies that allegedly "rip people off." And there is a list of invention submission companies including a post about Invent Help

As a patent attorney I often tell inventors that my job is to try to protect their invention by filing a patent application. But there's no guarantee that the inventor will ever get a patent. And even if a patent is allowed there's also no guarantee the product will ever be marketed. In reality, few patents make money, most real invention service providers are highly selective about who they work with. 

The inventor/product developer has to wear many hats: manufacturer, marketer and distributor. More often than not the inventor does not have any of these skills. So inventors have to reach out for help. Invention submission companies have moved to fill this void and prey on this obvious weakness.

Essentially, inventors feel like they can't do it all themselves and they need someone to help them get it done. Invention companies know inventors have limited opportunities to get their products to market, and inventors may naively put their faith in invention submission companies persuasive claims.

I often counsel inventors that like the ancient Chinese philosopher once said, “every thousand mile journey starts with the first step" and the patent is that first step. Getting a patent isn't like a lottery ticket and once you have the patent the checks start rolling in. The product simply will not sell itself, but if it does sell, a patent attorney will help to ensure you are protected. There's a good checklist  of things an inventor should do described as the ABC's of inventing in Inventors Digest.

An inventor should deal with each aspect of the invention process separately to get quality, legitimate vendors. Inventors should always use patent lawyers/agents for filing and searching; use specialists for services such as prototype or mold making, manufacturing, market evaluation, advertising and licensing.

I often ask an inventor, " If your Idea is so good, instead of charging an upfront fee, shouldn't the invention submission company give you a royalty agreement contingent upon the product selling?"
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