Patent It Yourself - PDF Archive

ChaPter 11 | How to MARKET YOUR INVENTION | 307
Don’t Use a Fee-Based Inventor-Exploiter
There are other firms, which I call fee-based inventorexploiters
(FBIEs), that you should generally avoid like the
plague. Paul Turley of the FTC reported that of 30,000
people who paid such FBIEs a fee, not one ever received
any payback. These companies or organizations run ads in
newspapers, magazines, radio, and TV, stating something
like “Inventions and Ideas Wanted!” They will commonly
first send you an “inventor’s kit” that includes a disclosure
form similar to my Form 3-2 and that promises to “evaluate”
your invention for free or for a relatively small fee (say
$200 to $600). The evaluation almost always is glowingly
positive. Then they’ll ask for a relatively large fee—$1,000
to $5,000 and up—using very high-pressure sales tactics.
They’ll promise to do “market research” and try to sell your
invention or have it manufactured. They sometimes also
take a percentage (for example, 20%) of your invention.
Generally, FBIEs will do little more than write a brief
blurb describing your invention and send it to prospective
manufacturers in the appropriate fields. Their efforts are
virtually 100% unsuccessful, as reported in the article
“Patent Nonsense,” in the Wall Street Journal, 1991 Sept
19, and on the TV program “20/20” on 1995 Jun 6. In other
words, FBIEs make their money from inventors, not
inventions (S.P. Gnass). For this reason I recommend you
not use an invention promoter unless you find one that
can establish a successful track record—that is, a record of
bringing a significant percentage of its clients more royalties
than the fees it charged them.
As a result of federal legislation (35 USC 297), FBIEs must
now make certain disclosures to prospective customers. If
they don’t, they can be sued for false statements or material
omission. The invention promoter must disclose to you in
writing:
• the total number of inventions evaluated by the FBIE
for commercial potential in the past five years, as well as
the number of those inventions that received positive
evaluations; and the number of those inventions that
received negative evaluations
• the total number of customers who have contracted with
the FBIE in the past five years, not including customers
who have purchased trade show services, research,
advertising, or other non marketing services from the
invention promoter or who have defaulted in their
payment to the FBIE
• the total number of customers known by the FBIE to
have received a net financial profit as a direct result
of the invention promotion services provided by such
invention promoter
• the total number of customers known by the FBIE to
have received license agreements for their inventions
as a direct result of the invention promotion services
provided by such invention promoter, and
• the names and addresses of all previous FBIE companies
with which the invention promoter or its officers have
collectively or individually been affiliated in the previous
ten years. This statute also enables defrauded customers
to recover $5,000 minimum in damages and sometimes
triple damages against an FBIE who violates it.
In other words, these requirements should tell you about
the experience, track record, volume of services, and the
effectiveness of the firm. A word to the wise: Despite this
strict statute and its penalties, many FBIEs still operate at
full steam and still defraud inventors of millions of dollars
annually. They do this in spite of the disclosures that the
above statute requires them to make by telling prospective
customers something like, “This means nothing—we’re
required to show you this. Don’t worry about this but look
at the bright side: We’ll prepare a great color presentation
and present your invention to industry and they’ll be
clamoring for it and you’ll make a lot of royalties and will be
able to retire, etc. etc.”
Note that the PTO does not investigate complaints or
participate in legal proceedings against invention promoters.
The PTO will accept complaints, forward these complaints
to the FBIEs, and make the complaints and responses
publicly available on the PTO’s Independent Inventor website.
To learn what you will need to file a complaint, visit the
PTO website (www.uspto.gov/web/forms/2048a.pdf) for a
complaint form (PTO Form SB/2048). Complaints should be
mailed to the following address:
United States Patent and Trademark Office
Mail Stop 24, P.O. Box 1450
Alexandria, VA 22313-1452
If you’ve paid an FBIE money and feel that you’ve been
victimized, or if you are considering paying money to one, an
“Inventor Angel” who may be able to help is Penny Ballou in
Las Vegas (702-435-7741, or email her at InventSSN@aol.com).
To learn more about FBIEs, go to www.inventnet.scam.
html or www.inventorfraud.com.
Here’s a couplet to consider regarding fee-based
invention promoters:
A fee-based promoter is a business to shun;
My advice is simple: Take your money and run!