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:

• 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:

• Federal Trade Commission publishes what inventors need to know about dealing with Invention Promotion Firms

• National Congress of Inventor Organizations (NCIO) offers free articles, information, resources, and an online magazine America’s Inventor Online. To contact NCIO, call toll-free 1-323-878-6952

• United States Patent and Trademark Office (USPTO) has a scam prevention page and a list of published complaints

• 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

• An article by Brown & Michaels, Invention Marketing Companies: Are they for real?  provides information based on public record and press reports on a  number of invention companies under the heading What about “Company X”?

• Mary Bellis of About.com in Guide to Inventors wrote an article that gives a nice checklist for inventors entitled, “How To Avoid an Invention Company Scam”

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?”