Facts for Consumers About Invention Promotion Firms

2/15/2015

You may have a great idea for a new product or service, but a great idea is not enough. You need to know how to develop and market it commercially. You could try to sell your idea or invention to a manufacturer who would market it and pay you royalties. But finding such a company could be an overwhelming task. You also could consider using the services of an invention promotion firm.

Some invention promotion firms may help you get your idea or invention into the marketplace. But be aware, some inventors have paid thousands of dollars to firms that promised to evaluate, develop, patent, and market inventions and got nothing for their money.

So be cautious. Your enthusiasm for your idea may make you vulnerable to promoters who make false or exaggerated claims about the market potential of your invention.

This guide tells you how to spot some common signs of trouble, how to protect yourself, and what to do if you become a victim. It also lists government agencies and private organizations that offer additional information and assistance.

How to Identify Legitimate Firms

Often, it is difficult to distinguish between a fraudulent invention promotion firm and a legitimate one. This may be because unscrupulous and honest firms often use many similar advertising and sales techniques, market evaluations, and contract strategies. However, there are some comparisons made in the next three sections that may help you identify legitimate companies.

Advertising and Sales Techniques

Some invention promotion firms advertise through television and radio, and classified ads in newspapers and magazines. They target independent inventors, frequently offering free information to help them patent and market inventions. They also may advertise a toll-free "800" telephone number that inventors can call for written information. However, the information may consist only of brochures about the promoter.

If you respond to the ads, you may hear from a salesperson who will ask for information about yourself, your idea, and a sketch of the invention. As an inducement, the firm may offer to do a free preliminary review of your invention.

Also, some invention promotion firms may claim to know or have special access to manufacturers who are likely to be interested in licensing your invention. Further, some promotion firms may claim to have been retained by manufacturers who are looking for new product ideas. These kinds of claims often can be false or exaggerated. Therefore, before signing a contract with an invention promotion firm who claims special relationships with appropriate manufacturers, ask for some proof.

A Market Evaluation

After giving your invention a preliminary review, a firm might tell you it needs to do a market evaluation on your idea, which may cost several hundred dollars. Such reports from questionable firms often make vague and general statements and provide no hard evidence that there is a consumer market for your invention. Reputable company reports, on the other hand, deal with specifics. Before you pay for a report on your idea, ask what specific information you will receive.

A Marketing and Licensing Contract

Some invention promotion firms also may offer you a contract where they agree to act as your exclusive marketing and licensing agent. For this, a questionable firm may require you to pay an upfront fee of as much as $10,000 and to commit a percentage of the royalties the invention may earn. On the otherhand, reputable licensing agents typically do not rely principally on large upfront fees. They normally rely on royalties from the successful licensing of client inventions and are very selective about which ideas and inventions they pursue. A request for an upfront fee frequently is another distinguishing characteristic of a questionable invention promotion company.

How to Protect Yourself

If you are interested in working with an invention promotion firm, consider taking the following precautions before you sign a contract and pay significant amounts of money.

In reality, few inventions make it to the marketplace and still fewer become commercial successes. According to experts used in FTC cases, an invention promotion firm that does not reject most of the inventions it reviews may be unduly optimistic, if not dishonest, in its evaluations.

What to Do if You are a Victim

If you believe you are a victim of a fraudulent invention promotion, first contact the firm and try to get your money back. If you are unsuccessful, report your problem to your Better Business Bureau, local consumer protection agency, and the Attorney General in your state and in the state where the company is located. Your information may help an ongoing investigation or demonstrate the need for one.

You also may file a complaint with the [Federal Trade Commission])http://www.ftc.gov). The FTC generally does not intervene in individual disputes. However, the information you provide may indicate a pattern of possible law violations.

Related Articles

How and Where to Get Money for a Franchise Idea

11/29/2013

How often have you thumbed through a business opportunity magazine, noticed a franchise opportunity advertisement, and felt you'd really like to get in on that...if only you had the money?

Checklist of Questions to Answer Before You Buy a Franchise

12/3/2013

Franchise businesses such as Wendy's, McDonald's and Jack-In-The-Box are booming. The people setting up franchise ideas and businesses know a good thing, and are really promoting this idea.

Secrets of the Richest People

12/10/2013

Would you like to realize your goals? Maybe you'd like to run your own business, expand your material possessions, or succeed in the arts. There is no one path to the pot of gold, but many people of all backgrounds have successfully found it.

What Makes an Entrepreneur Tick?

12/10/2013

It is only natural that when you start a business, you are doing something different than most people.

How to Raise Money for Your Franchise

12/2/2013

How often have you thumbed through a business opportunity magazine, noticed a franchise opportunity advertisement, and felt you'd really like to get in on that... if only you had the money?

What to do if Somebody Owes You Money

12/10/2013

If you are owed money and have not received any payment over a reasonable period of time, there are several steps you can take to collect, even before going to the expense of hiring a collection agency or lawyer.

How to Raise Money for Starting a Business

12/2/2013

The task of raising money for a business is not as difficult as most people seem to think. This is especially true when you have an idea that can make you and your backers rich.

Secrets of Economizing in Inflationary Times

12/30/2013

During periods of high inflation, most people have to "tighten their belts," and watch their expenditures a bit more closely. After all, buying on credit and attempting to spend more than you have coming in is a sure-fire road to financial ruin.

Smart Stamp And Coin Investment

11/19/2013

The fact that there are far more stamp and coin dealers than stamp and coin brokers, that few wealthy people hold portfolios of these collectibles, and that few hobbyists ever live long enough to get rich from their knowledge, tells us something.

Terms of Use

All content provided on this website is for general informational purposes only. No warranty is expressed or implied. Your use of this website is subject to our Terms of Use.