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According
to the consumer education materials released today,
inventors should know that there are different kinds
of patents.
A
utility patent, which grants the inventor of any new
and useful process or machine exclusive rights to
the invention, may offer more protection than a design
patent, which grants to any new ornamental design
for an article of manufacture.
"Unscrupulous invention promotion firms often
apply for patents that provide such limited legal
protection that it is easy for competitors to find
a way to design around the patent," states an
FTC brief on invention promotion firms.
Other
firms might say that registering your idea with the
USPTO's Disclosure Document Program protects your
idea, but that is not true, the brief states. Joining
this program, which costs $10, only provides evidence
of the date of conception of the invention.
Other
tips and information included in the materials include:
Heads
Up
If
you're interested in working with an invention promotion
firm, here's information that can help you avoid making
a costly mistake.
Many
fraudulent invention promotion firms offer inventors
two services in a two-step process:
•
One involves a research report or market evaluation
of your idea that can cost you hundreds of dollars.
•
The other involves patenting or marketing and licensing
services, which can cost you several thousand dollars.
•
Early in your discussion with a promotion firm, ask
for the total cost of its services, from the "research"
about your invention through the marketing and licensing.
Walk
away if the salesperson hesitates to answer.
• Many fraudulent companies offer to provide invention
assistance or marketing services in exchange for advance
fees that can range from $5,000 to $10,000.
Reputable
licensing agents rarely rely on large upfront fees.
•
Unscrupulous invention promotion firms tell all inventors
that their ideas are among the relative few that have
market potential.
•
Many questionable invention promotion firms claim
to have a great record licensing their clients' inventions
successfully.
•
Ask the firm to disclose its success rate, as well
as the names and telephone numbers of their recent
clients.
•
Success rates show the number of clients who made
more money from their inventions than they paid to
the firm.
•
Check the references. In several states, disclosing
the success rate is the law.
•
Ask an invention promotion firm for its rejection
rate—the percentage of all ideas or inventions that
the invention promotion firm finds unacceptable. Legitimate
firms generally have high rejection rates.
•
Fraudulent invention promotion firms may promise to
register your idea with the U.S. Patent and Trademark
Office's Disclosure Document Program. Many scam artists
charge high fees to do this. The cost of filing a
disclosure document in the PTO is $10. The disclosure
is accepted as evidence of the date of conception
of the invention, but it doesn't offer patent protection.
• Unscrupulous firms often promise that they will
exhibit your idea at tradeshows. Most invention promotion
scam artists don't go to these tradeshows, much less
market your idea effectively.
•
Many unscrupulous firms agree in their contracts to
identify manufacturers by coding your idea with the
U.S. Bureau of Standard Industrial Code (SIC). Lists
of manufacturers that come from classifying your idea
with the SIC usually are of limited value.
Common
Sense Tips
• Contracting for the services of an invention promotion
firm is no different from making many other major
purchases. Apply the same common sense.
•
Question claims and assurances that your invention
will make money. No one can guarantee your invention's
success.
•
Investigate the company before you make any commitment.
Call the Better Business Bureau, the consumer protection
agency, and the Attorney General in your city or state,
and in the city or state where the company is headquartered
to find out if there are any unresolved consumer complaints
about the firm.
•
Make sure your contract contains all the terms you
agreed to—verbal and written—before you sign. If possible,
ask an attorney to review the agreement.
• Remember that once a dishonest company has your
money, it's likely you'll never get it back.
•
Reputable companies are choosy about which ideas they
pursue, and typically work on a contingency basis.
If a firm is enthusiastic about your idea, but insists
on a substantial up-front fee, take your business
elsewhere.
•
A firm that claims you need to hurry and patent your
idea quickly before someone else does is engaging
in high pressure sales tactics, a red flag for fraud.
•
Many firms claim to have a great record licensing
their clients' inventions. Ask the firm to disclose
its success rate, the number of clients who made more
money from their inventions than they paid to the
firm for its services. Also ask for the names and
telephone numbers of recent clients. Check the references,
and check with your state Attorney General's office
to determine whether state law requires success rate
disclosure.
•
Many unscrupulous firms agree in their contracts to
identify manufacturers by coding your idea with the
U.S. Bureau of Standard Industrial Code (SIC). Lists
of manufacturers that come from classifying your idea
with the SIC usually are of limited value.
The
materials also suggest places consumers may want to
call, write, or visit on the World Wide Web, including
the FTC's web site (www.ftc.gov ), the USPTO's web
site (www.uspto.gov) or the web site of the National
Congress of Inventor Organizations at (www.inventionconvention.com/ncio.index.html).
Copies of the complaints, as well as the consumer
education materials, are available from the FTC's
web site at http://www.ftc.gov and also from the FTC's
Public Reference Branch, Room 130, 6th Street and
Pennsylvania Avenue, N.W., Washington, D.C. 20580;
202-326-2222; TTY for the hearing impaired 202-326-2502.
To find out the latest news as it is announced, call
the FTC NewsPhone recording at 202-326-2710.
