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  Invention Marketing Firms ­ A Warning

 

What is an invention marketing firm?

 

An invention marketing firm is a business that offers services to review the inventions of independent inventors and market the inventions to manufacturers.  Firms of this type usually advertise on television, on the radio, in newspapers and magazines, on the Internet, in the mail, or on flyers.

 

Why should an independent inventor be concerned about working with an invention marketing firm?

 

There are honest, legitimate invention marketing firms that may prove to be very helpful to an independent inventor.  However, some of these firms are not legitimate or have questionable business practices, not being up front with their clients.

 

Many firms will try to entice a new inventor with a small fee (or no fee) for initial services, but will charge up to tens of thousands of dollars for later services, once the inventor is hooked.  The manner in which fees are requested may clue an inventor in on whether a firm is legitimate or otherwise unethical.  For example, sometimes a firm will talk an inventor into paying a higher up-front fee in order to pay less royalties later.  When the invention ends up not taking off, the firm ends up ahead.

 

Questionable firms will prey upon the enthusiasm of an independent inventor as well as his greed, and will take advantage of an independent inventor if not careful.  Salesmen for a questionable firm will show enthusiasm in the market potential and urgency in starting the process without even knowing anything about the idea.  The inventor may then become vulnerable to possible false or misleading claims about the invention’s market potential.

 

Some invention marketing firms offer varying levels of protection for inventions, and may not explain the differences.  Some do not really offer any invention protection at all.

 

Questionable firms tend to follow similar patterns.  For example:

  • A firm may charge a small fee to “evaluate” the invention ­ typically $300-800.  This evaluation may include a patent search, which may not be accompanied by a legal opinion.
  • A firm may present a glossy report letting you know how valuable your invention is to the market.  Some of these reports are just boilerplate with only the inventor and invention changed.
  • A firm may request a larger fee (typically $6,000 to $18,000) to:
    • File a patent application
      • Some may file only a design patent application, which does not prevent the utility of the invention, or may file a very narrow utility patent which does not offer much protection at all.
    • Display the invention at trade shows
      • Some may just show it at a trade show for invention marketing firms as opposed to manufacturers.
    • Add the invention to a database
      • Some may just keep it in their own database.
    • Include the invention in a brochure or flyer
      • Some may send a brochure of unrelated inventions to unrelated manufacturers.  If these publications are out for more than a year before the patent application is filed, the patent may be barred.
    • Tell inventors of offers and help with license negotiations
      • There are usually very few, if any, offers.

 

Relevant Legislation

 

The American Inventors Protection Act of 1999 (coded in 35 U.S.C. § 297) took effect on January 29, 2000.  It imposes a duty on invention marketing firms to disclose information to prospective clients before they sign contracts.  According to the Act, an invention marketing firm must disclose:

 

  • Number of inventions evaluated in past 5 years
  • Number of these which received positive and negative evaluations
  • Number of clients who contracted with them in last 5 years
  • Number of these clients who received a net financial profit as a direct result of the promoter’s services
  • Number of clients who have received license agreements for their inventions as a direct result of the promoter’s services
  • Names and addresses of all previous invention marketing firms with which the promoter or its officers have been affiliated for the last 10 years

 

The Act also says that a client who has contracted with an invention marketing firm and has been injured by omission of these facts, or a material fact, or a material or misleading statement by the firm will have a civil cause of action for actual or statutory damages of up to $5,000, plus costs and attorneys fees.  In addition, if the court finds the firm’s actions as willful, the damages may be trebled.

 

USPTO and FTC Involvement

 

The US Patent and Trademark Office (PTO) and the Federal Trade Commission (FTC) pulled together in 1997 in a joint effort to combat fraudulent and questionable invention marketing firms who are misusing the patent system and defrauding inventors.  The “Project Mousetrap” campaign’s goals are to enforce laws against fraud, and to protect and educate inventors and consumers.  Some state governments are involved as well.

 

Prior to “Project Mousetrap,” only a few individual cases were brought to address the issue, but the FTC believed that a larger “sweep” and more consumer education was needed to curb what seemed to be a persistent problem.  Since the start of the “Project Mousetrap” campaign, many cases against fraudulent invention marketing firms have been brought, and many of these settled, paying millions of dollars back to defrauded inventors.

 

What can an independent inventor do to protect oneself and his/her invention?

 

The inventor should make sure he/she knows what is wanted from the business relationship.  For example, the inventor should understand that patenting an invention is distinctly different from marketing an invention.  If patent protection is desired, make sure a registered patent attorney or agent is involved.  Only a registered patent attorney or agent can file an invention with the U.S. Patent and Trademark Office (PTO).  The PTO can provide a list of registered patent attorneys/agents.  A patent attorney will meet with an inventor to let the inventor know if there is even an invention.  If the patent attorney thinks so, an inventor may want to spend the money on a patent search to make sure.  Then, the inventor must decide if willing and able to spend the money necessary to obtain a patent.

 

If the inventor does choose to do business with an invention marketing firm, the inventor should ask the right questions and be critical of the responses in order to distinguish between a fraudulent or questionable invention marketing firm and a legitimate one.  For example:

 

  • Ask what names the firm has done business under, how long it has been in business under the current name, and if it or an affiliate was a party to any Federal Trade Commission (FTC) punitive actions.
  • Ask for proof if a firm claims to have a special relationship with certain manufacturers who may be interested in the invention.
  • Ask about its invention assessment criteria, its system of review, and the qualification of its invention evaluators.
  • Before paying a fee for a market analysis for the invention, ask what specific information will be presented in the report.  A questionable firm will offer a vague report, but a reputable one will be more specific.  Also try to verify some of the information in the report, once it is received.  Questionable firms may use boilerplate reports and just change the inventor’s name and invention.
  • Ask what the total cost will be.
  • Ask what the fee schedule will look like.  Questionable firms will ask for upfront fees, while reputable firms will normally rely on the royalties of successful inventions.
  • Insist that the firm do a patent search for valid patents upon which your invention may infringe, and make sure a patent professional is involved.
  • Ask for the firm’s success and rejection rates in writing.  With reputable firms, rejection rates should be fairly high, and success rates should be very low.  If words like “more than” or “less than” are used, do not be misled.  Some firms are now required by state or local laws to disclose this information.  Beware that some firms may try to get your business in a state that does not provide this protection.  Also note that if the firm rejects your idea and turns it over to another who may actually be affiliated with them, this may be their way of being able to say that they reject more ideas than they really do.
  • Ask for names and addresses of at least three inventors the firm represented in the inventor’s state to use as references.
  • Ask for brand name successes.  If they say they cannot tell you the inventor’s name due to confidentiality, they can surely tell you about the product, and you can attempt to find out on your own who the inventor was.

 

A list of these and further questions can be found at: http://www.exxnet.com/resources/scam.htm.  The following are some further suggestions:

 

  • Do not be impressed by fancy promotional brochures.
  • Pay attention to fine print and disclaimers.
  • Be suspicious if:
    • The salesperson can never be reached directly, or if he or she is not willing to provide a direct phone number.
    • The company claims to be in one state but mail comes from another.
    • The company asks the inventor to describe the invention in writing and mail it to himself.  This is not invention protection.
  • Be skeptical of high-pressure sales tactics.
  • Check with the Better Business Bureau, Attorney General, and local consumer protection agency (in the inventor’s state and the state where the firm is located) to investigate the firm further.  Ask if the firm is licensed to operate in the inventor’s state.  Note that since these firms change names often, there may not be any information found at these locations.
  • Obtain legal counsel if the firm wants the inventor to sign a contract in another state.
  • Consider bringing along an objection listener to meetings with the firm.
  • Be skeptical of, and make sure the inventor understands, any money-back guarantees.  Many of these guarantees are easy to achieve even if they end up being worthless.
  • Talk to other invention marketing firms and compare their services.
  • If your questions to the firm were not sufficiently answered, then rethink signing any contract with that firm.
  • Do not sign an agreement until all terms are in writing and an attorney has reviewed it.

 

What should an inventor do if the inventor thinks he/she has become a victim of a fraudulent invention marketing firm?

 

If the inventor believes that he/she has become a victim of a fraudulent invention marketing firm, he/she should:

  • Attempt to get money back from the firm.
  • Report it to the Better Business Bureau, Attorney General, and local consumer protection agency (in the inventor’s state and the state where the firm is located).
  • File a complaint with the U.S. Patent and Trademark Office (PTO).
  • File a complaint with the Federal Trade Commission (FTC).

 

The most important point of this warning is for THE INVENTOR to be involved with the protection and marketing of the invention, and to do this, the inventor needs to be aware and knowledgeable of every stage of the process.  The inventor must remember to keep control of his invention, be realistic with expectations of success, and scrutinize anyone who claims they can help.  The power to protect the invention comes from the inventor him/herself.

 

Further Information

 

More information can be obtained from the following sources:

 

Inventor Organizations

 

The following are some inventor organizations which may be of interest:

  • United Inventors Association of the United States of America (UIA-USA)
  • National Congress of Inventor Organizations (NCIO)
    • Phone: 1-213-878-6925
  • Minnesota Inventors Congress
    • Phone: 1-507-637-2344

 

Recognition of Resources

 

This information found here was compiled from information found in the following sources:

 

 


 

Appendices

 

 

A. Vocabulary List

 

Throughout the text of this booklet are certain words that you should know.  The first time the word is listed in the text, it is printed in bold and italicized type.  You should make a list of these terms and understand their meaning and importance to inventing, product development, and marketing the product.  These terms are listed below with references to the page where they were first mentioned.

 

 

Term

Page

Term

Page

assignment

7

patent agent

 

9

business plan

 

25

patent attorney

 

9

claim

 

4

plant patent

 

4

confidential disclosure agreement

 

11

prior art

 

4

continuation-in-part

 

17

prototype

 

15

continuing application

 

17

royalty

 

21

copyright

 

38

service mark

 

35

design patent

 

4

specification

 

4

foreign filing license

 

17

trade name

 

35

intellectual property

 

3

trade secret

 

19

license

 

21

trademark

35

notice of allowance

17

utility patent

 

4

patent search

 

8

venture capital

28

 

B. Most Often-Asked Questions

 

 

Patents

Can I use the term “patent pending” or “patent applied for” if I am planning to get a patent?

No.  The only time you may use these terms is if your application is already under consideration by the Patent and Trademark Office.  Even then, the terms “Patent Pending” and “Patent Applied For” afford no legal protection.

 

Is a patent search required before applying for a patent?

No.  But performing a patent before filing a patent application is highly recommended.  If the search reveals a similar device patented in an earlier patent, you may avoid the costs of filing for a patent that will fail to be granted.  Performing a patent search will also help you to avoid patent infringement.

 

Is a patent required on an invention prior to the inventor selling it?

No.  However, you will only have the right to prevent others from making, using, or selling the invention if a patent is obtained on it.  Also keep in mind that if you still want a patent after you begin selling the invention, you must file your patent application within one year of commercialization.

 

Is a prototype required for filing a patent application?

Not usually.  However, having a working model helps because it gives you a stronger claim to the idea if you have it reduced to practice before someone else.

 

Can protection be preserved on an invention before a patent is applied for?

Although your invention cannot have patent protection until a U.S. patent is issued on the invention, you can still take measures to preserve some protection on it before filing an application.  This can be done by establishing evidence of your invention’s progress (e.g., inventor’s notebook) and keeping the invention a secret.

 

May a patent be transferred?

A patent is regarded as personal property and the owner may sell all or part of his interest in a patent to anyone by a properly worded assignment.  This will transfer ownership of the patent to the assignee who will then have the right to exclude others from making, using, or selling the invention.  If someone other than the patent owner wants to make, use, or sell the invention, a license is used. 

 

Can I apply for a patent without going through an attorney?

Yes.  However, since the U.S. Patent and Trademark Office rules concerning patent applications are complex and change often, it is recommended that a patent attorney or agent be used in order to have the best protection on your invention.

 

Is it possible to obtain a patent for an improvement made on a device or process that’s already been patented?

Yes.  You may obtain patent protection for an improvement to a device.  However, if you build the improvement and market it in conjunction with the original device, you would infringe the original patent.

 

Copyrights

Why would I want to register a copyright if copyright protection is automatic upon the work’s creation?

Registering a copyright on your work would offer you procedural advantages if you ever needed to prevent the unauthorized copying of your work.

 

When does an employer own the copyright?

If a work is created within the scope of an employee’s duties, copyright law deems the author of the work to be the employer.  Therefore, the employer would then own the copyright.

 

May a copyright be transferred?

As with patents and trademarks, a copyright is regarded as personal property and can be transferred to another party through use of an assignment.  Copyrights may also be willed to heirs, sold, or licensed under a contract.

 

Trademarks

May a trademark be transferred?

Trademarks are regarded as personal property and can be transferred through use of a properly worded assignment.

 

If I’m using a trademark that’s similar to someone else’s trademark, is that infringement?

If your mark is similar enough to someone else’s trademark to cause confusion between your product and another company’s product, you can be sued for trademark infringement.

 

 

C. Helpful Contacts

 

Patent, Trademarks, & Copyrights Information

U.S. Patent and Trademark Office

U.S. Dept of Commerce

Washington, DC 20231

703/557-4636

1-800-786-9199

Depository Library  703/308-9000

www.uspto.gov

U.S. Copyright Public Information Office

Library of Congress

Madison Building, Room 401

101 Independence Ave., S.E.

Washington, DC 20559

General Information:  202/707-3000

Copyright forms hotline: 202/707-9100

Lcweb.loc.gov/copyright

N.C. Science & Tech. Research Center

(Trademark info only)

919/549-0771

 

DH Hill Library

U.S. Documents Department

NCSU

919/515-3280

www.lib.ncsu.edu/libraries/risd/govdocs

Trademark Assistance Center

703/308--9000

N.C. Dept of the Secretary of State (Trademark info only)

919/733-4129

www.state.nc.us/secstate

 

 

Patent and Trademarks Enforcement Assistance

U.S. International Trade Commission

Washington, DC  20436

202/482-2000

www.usitc.gov

U.S. Customs Service

Dept. of the Treasury

511 NW Broadway

Portland, OR  97209

503/326-2871

 

 

 

Electrical and Safety Consumer Testing Agencies

Underwriters Laboratories

Melville, NY

516/271-6200

Purpose: To obtain UL listing for electrical products

 

Canadian Standards Association

178 Rexdale Blvd.

Rexdale (Toronto) Ontario, Canada M9W 1R3

416/747-4000

Purpose:  If marketing in Canada is desired

 

Association of German Electrical Engineers (VDE)

UL, Inc.

12 Laboratory Drive, P.O. Box 13995

RTP, NC 27709

919/549-1545

 

Association of Independent Scientific, Engineering, and Testing Firms (ACIL)

1629 K Street, NW, Suite 400

Washington, DC  20006

202/887-5872

Purpose:  Operational and safety testing

 

 

 

Legal Referrals & Assistance

North Carolina Bar Association

919/677-0561

 

N.C. Lawyers Referral Service

800/662-7407

North Carolina State Bar

919/828-4620

 

 

 

D. Free or Inexpensive Journals and Publications

 

Journals

 

Intellectual Property

(for a list of on-line Intellectual Property resources, see Appendix “Internet sources of patent, trademark, or copyright information”)

 

Inventors’ Digest

Bi-monthly publication with on-line version: www.inventorsdigest.com

 

Entrepreneurship & Small Business

 

Edge On-line

Small business articles: www.edgeonline.com/

Note: The “Business Toolbox” section has interactive modules to aid market planning, financial management , personnel development, and other business activities.

 

Entrepreneur

weekly magazine with website: www.entrepreneurmag.com/

note: has a “Bright Ideas” column on inventing

 

Internet Business Newsletter

weekly e-zine: adfree.com/IBNLINFO.htm

note: free business links for advertising and education

 

The Small Business Journal

www.tsbj.com/

 

Success Magazine

Monthly magazine with website: www.successmagazine.com/index.html

note: focuses personal and organizational effectiveness

 

Trade Secrets

e-zine: www.gracefield.com/gg/news-nl.htm

note: tips to start and grow your business successfully

 

Business & Economics News

 

Financial Times

www.usa.ft.com

 

Inc

www.inc.com

 

Investors Business Daily

www.investors.com

 

Charlotte Business Journal

Newspaper with website: www.amcity.com/charlotte/

 

Triangle Business Journal

Weekly newspaper with website: http://www.amcity.com/triangle/

note: important source for regional business news, particularly in the Raleigh-Durham area

 

Wall Street Journal

Newspaper with website: wsj.com

 

Marketing

 

Advertising Age

Weekly magazine with website: www.adage.com/

 

Adweek

Weekly magazine with website: www.adweek.com/

 

American Demographics

Marketing research website: www.marketingtools.com

Note: allows for full text searches of American Demographics articles; contains a directory of marketing services and a catalog of data sources, marketing books, and research materials

 

To search for articles

 

The UMI ProQuest Direct periodicals database is available at all libraries participating in NC Live.  Through this resource you can search for articles from the New York Times, the Wall Street Journal, and other publications.  Most often the full text of an article you find in the database is available and can viewed on the screen or printed up.  Ask for librarian assistance.

 

Many public libraries and most university libraries have InfoTrac.  Through this database, you can search for articles categorized by Standard Industry Classification codes or by an expanded academic index.  The full text of some articles is within the database.  Ask for librarian assistance.

 

 

Publications

 

Small Business and Technology Development Center (SBTDC)

See listing of offices at URL: http://www.sbtdc.org/

                Capital Opportunities for Small Businesses                 $12.00

                Business Start-up Kit and Resource Guide                   free

 

US Department of Commerce’s Patent and Trademark Office

The following are available free on-line or in booklet form.  See www1.uspto.gov or call 703/308-4257 for information about ordering.

                Basic Facts About Patents

                Basic Facts About Trademarks

                The Disclosure Document Program

 

The Small Business Administration (SBA), Charlotte

Call 704/344-6563 for information or see their website: www.sba.gov/regions/states/nc

                Ideas Into Dollars

Avoiding Patent, Trademark, and Copyright Problems

                Trademarks and Business Goodwill

 

Licensing Executive Society

Call 703/836-3106 for information or see their website: www.usa-canada.les.org/index.html

The Basics of Licensing

 

U. S. Copyright Office

Call 202/707-9100 or see their website: lcweb.loc.gov/copyright

Copyright Basics

Publications on Copyrights

 

American Bar Association

These publications are not free but not expensive.  Call the Publications Department at 312/988-5000 or see their website: www.abanet.org

Marketing Your Invention

What Is a Patent?

What Is a Copyright?

Submitting an Idea to a Manufacturer

Software Licensing Contracts

 

 

 

E. Other Recommended Readings

 

These publications, as well as others, are available at your local library and/or bookstores:

 

Business plan assistance

Covello, Joseph.  Your First Business Plan.  2nd ed.  Sourcebooks, Inc., 1995. 

Kahrs, Kristin and Koek, Karin, eds.  Business plans handbook:  a compilation of actual business plans developed by small businesses throughout North America.  Gale Research, Inc., 1995.

Siegel, Eric S.  The Ernst & Young business plan guide.  2nd ed..  Wiley, 1993.

Bangs, David H.  Business Planning Guide. Upstart Publishing Co., 1989.

Mancuson, Joseph R.  How to Write a Winning Business Plan. Prentice Hall Press, 1985.

 

Invention Promotion

Levy, Richard C.  The Inventor’s Desktop Companion. Visible Ink Press, 1995.

Smith, Martin C.  How to Avoid Patent, Marketing, & Invention Company Scams  Wow!  What a Great Idea.  Now What?  1995.

Fussel, David.  The Secret to Making your Invention a Reality.  Invention-Press, 1994.

Gold, Robert J.  Eureka!  the entrepreneurial inventor’s guide to developing, protecting, and profiting from your ideas.  Prentice Hall, 1994.

Franklin, Reece A.  How to sell and promote your idea, project, or invention:  an excellent marketing guide for both novice and seasoned inventors.  Prima Pub., 1993.

Mosely, Thomsas, Jr.   Marketing Your Invention. Upstart Publishing Co., 1992

Sperry, Robert M.  You’ve Got an Idea-- Now What?  Woodland Hills B&B Enterprises, 1992.

Griffin, Gordon D.  How to Be a Successful Inventor; Turn Your Ideas into Profit.   John Wiley and Sons, Inc., 1991.

Winfield, Armand G.  The Inventor’s Handbook.  Prentice Hall, 1990.

Grissom, Fred and Pressman, David. The Inventor’s Notebook. Nolo Press, 1989.

Lynn, Gary S.  From Concept to market. John Wiley & Sons, Inc., 1989.

Park, Robert.  The Inventor’s Handbook; How to Develop, Protect, & Market Your Invention. Betterway Publications.

 

Patents

Carr, Fred K.  Patents handbook:  a guide for inventors and researchers to searching patent documents and preparing and making an application.  McFarland, 1995.

Redman, Tina.  The Inventor’s Handbook on Patent Applications.  Vantage Press, 1993.

Peterson, Stuart R.  Patents, getting one--:  a cost-cutting primer for inventors.  Academy Books, 1990.

Pressman, David.  Patent It Yourself. Nolo Press, 1989. (be careful using this if you want a good patent.)

 

Venture Capital

Venture Economics Staff.  Pratt’s Guide to Venture Capital Sources.  20th ed.  Phoenix Oryx Press, 1996.

 

 

 

 

F. Internet Sources of Patent, Trademark, or Copyright Information

 

Many of the following sites have been mentioned in the text of this document.  We have listed them here for your convenience.

 

Site

Pertinent content

Address

U.S. Patent and Trademark Office (US PTO)

Patent-search resources; explanation of patent and trademark application process; application forms; PTO bulletin

http://www.uspto.gov/

U.S. PTO’s Independent Inventor Resources Site

The Independent Inventor site is dedicated to serving the special needs and interests of the independent inventor and entrepreneur

http://www.uspto.gov/web/offices/com/iip/index.htm

US Copyright Office, Library of Congress

Copyright application process; application forms

http://lcweb.loc.gov/copyright/

Patent Portal ­ Richard S. Gruener, Villanova

Patent-search resources

http://www.law.vill.edu/~rgruner/patport.htm/

University of Washington Engineering Library

Patent-search resources

http://www.lib.washington.edu/engineering/

Intellectual Property Network

Patent-search database (patent descriptions and images)

http://www.patents.ibm.com/

SPO

Free access to patents listed since 1972; offers for  commercial services

http://www.spo.eds.com/patents.html/

Andy Gibbs’ Inventor’s Resource

Patent, trademark, and industry search resources,; general IP and inventor information

http://www.gibbsgroup.com/

SBDC Research Network

Links to other patent information sites

http://www.smallbiz.sunycentral.edu/entre.htm/

Micropatent

Patent and trademark information

http://www.crcpress.com/

 

Franklin Pierce Law Center

Patent information

 

 

 

http://www.fplc.edu/IPMALL/

Kuester

Patent information

http://www.kuesterlaw.com/

Aimnet

Patent information

http://www.aimnet.com/~carroll/copyright/faq-home.html/

Templeton

Patent information

http://www.templetons.com/brad//copymyths.html/

European Patent Office

European-focused patent information; links to other internet resources for patent information

http://www.european-patent-office.org/online/index.htm/

Community of Science

US patent database updated weekly; information on research and development

http://patents.cos.com/

NC SBTDC

Information about services; links to state and federal sites

http://www.sbtdc.org/

 

 

 

 

G. North Carolina Patent Attorneys & Agents Registered to Practice before the U.S. Patent and Trademark Office

 

NC Patent Attorneys and Agents who are registered to practice before the PTO

 

For up-to-date regional listings see also: http://www.uspto.gov/go/attorney/region/, or you can obtain a list of patent attorneys and agents, listed alphabetically by geographic region, from the U.S. Government Printing Office: Superintendent of Documents; P. O. Box 371954; Pittsburgh, PA 15250-7954.  For information or to order by phone call 202/512-1800.

 

 


Apex  

SPEAKS, ELISE P.

102 BARNES SPRING CT.

APEX, NORTH CAROLINA  27502

919-303-5277

43147

Agent

 

STEPHENS, GREGORY

301 EDGEMORE AVENUE

APEX, NORTH CAROLINA  27502

919-468-2379

41329

Attorney

 

ZIMMERMAN, SCOTT P.

210 SNOW CAMP DR.

APEX, NORTH CAROLINA  27502

919-387-1968

41390

Agent

  Asheville  

CARTER, DAVID M.

CARTER & SCHNEDLER

P.O. BOX 2985

ASHEVILLE, NORTH CAROLINA  28802

704-