An invention promotion firm or invention submission corporation provides services to inventors to help them develop or market their inventions. These firms may offer to evaluate the patentability of inventions, file patent applications and license them to manufacturers, build prototypes, and market inventions. They are distinguished from more conventional consulting firms and law firms offering the same or similar services in that they market their services primarily to amateur inventors through the mass media.
Contents
- Performance
- US legal protections for inventors
- Project Mousetrap
- Aftermath
- Public posting of complaints against invention promotion firms
- Guidelines for identifying unscrupulous firms
- References
The US government estimates that there are hundreds of companies offer invention-promotion services and that "virtually all of them are either ineffective or outright fraudulent." An official at the U.S. Patent and Trademark Office "says he believes there are fewer than a half-dozen legitimate invention promoters in the country."
Performance
Accurate statistics of the success rate of invention promotion firms is difficult to come by. Nonetheless, as a result of certain legal actions taken against some of these firms, overall success rates have come to light. One such firm, Davison Associates, disclosed that of 900 ideas where a client had a prototype built of their invention at an average cost of $11,000, only 30 of those inventions were licensed within 6 months. Of the inventions licensed, only 10 made more in license fees than the cost of the invention promotion services.
US legal protections for inventors
After a massive fraud was being launched by a significant amount of invention promotion companies the 1999 American Inventors Protection Act (AIPA) established disclosure requirements for invention promotion firms. These disclosure requirements include:
The American Inventors Protection Act also provides civil penalties that can be assessed against invention promotion firms engaged in fraudulent or deceptive practices, defined by the FTC as "invention promotion scams".
The USPTO and the FTC both provide guidelines for finding legitimate invention development, prototyping and promotion firms, that comply with the AIPA.
Project Mousetrap
In 1997, the United States Federal Trade Commission launched “Project Mousetrap” to identify, prosecute and fine firms engaged in fraudulent or deceptive practices, in what was alleged as a massive fraud by a significant amount of invention promotion firms.
Aftermath
In 1998 all of the accused parties except one settled with the FTC and a $250,000 redress fund was set up for inventors taken in by the firms. In 2006, judgment was rendered against Davison & Associates. They were fined $US 26 million to be used to compensate defrauded clients. Davison appealed the judgment,and then settled with the FTC for $10.7 million in 2008.
Public posting of complaints against invention promotion firms
The United States Patent and Trademark Office (USPTO) posts complaints online from dissatisfied clients of invention promotion firms and provides an opportunity for invention promotion firms to respond to the complaints. The USPTO, however, does not investigate the validity of any of the complaints or responses.
Guidelines for identifying unscrupulous firms
Both the USPTO and the US Federal Trade Commission publish guidelines on how inventors can better determine if an invention promotion firm is scrupulous or not. Signs of an unscrupulous invention promotion firm include: