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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         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| Facts                         for ConsumersPDF Version
Invention Promotion Firms

Think you have a great idea for a                           new product or service? You're not alone. Every year,                           tens of thousands of people try to develop their ideas                           and commercially market them.

 Some people try to sell their idea                           or invention to a manufacturer that would market it                           and pay royalties. But finding a company to do that                           can be difficult. As an alternative, others use the                           services of an invention promotion firm. Indeed, some                           inventors pay thousands of dollars to firms that promise                           to evaluate, develop, patent, and market inventions...and                           then do little or nothing for their fees.

Unscrupulous promoters take advantage                           of an inventor's enthusiasm for a new product or service.                           They not only urge inventors to patent their ideas or                           invention, but they also make false and exaggerated                           claims about the market potential of the invention.                           The facts are: 
-  few inventions ever make it to the marketplace;                             and 
-  although a patent can provide valuable protection                             for a successful invention, getting a patent doesn't                             necessarily increase the chances of commercial                               success.

 There's great satisfaction in developing                           a new product or service and in getting a patent. But                           when it comes to determining market potential, inventors                           should proceed with caution as they try to avoid falling                           for the sweet-sounding promises of a fraudulent promotion                           firm.

Using Invention Promotion Firms

Advertisements for invention promotion                           firms are on television, radio and the Internet, and                           in newspapers and magazines. These ads target independent                           inventors with offers of free information on how to                           patent and market their inventions. Often, however,                           the only information you get is about the promoter.

If you respond to the ads —                           which may urge you to call a toll-free number —                           you may hear back from a salesperson who will ask for                           a sketch of the invention and information about you                           and your idea. As an inducement, a firm may offer to                           do a free preliminary review of your invention.

Some invention promotion firms may                           claim to know or have special access to manufacturers                           who are likely to be interested in licensing your invention.                           In addition, some firms may claim to represent manufacturers                           on the look-out for new product ideas. Ask for proof,                           such as contacts at manufacturers, before you sign a                           contract with any invention promotion firm that claims                           special relationships with manufacturers. If the promoter                           provides only one or two names, be careful: The contacts                           may be "shills" — people hired to give                           favorable testimonials.

After giving your invention a preliminary                           review, a firm might tell you it needs to do a market                           evaluation of your idea — for a fee that can be                           several hundred dollars. Many questionable firms don't                           do any genuine research or market evaluations. Sometimes                           the "research" is bogus, and the "positive"                           reports are mass-produced in an effort to sell clients                           on additional invention promotion and marketing services.                           Fraudulent invention promotion firms don't offer an                           honest appraisal of the merit, technical feasibility,                           or market potential of an invention.

Some invention promotion firms also                           may offer a contract in which they agree to help you                           market and license your invention to manufacturers.                           Unscrupulous promoters may require you to pay a fee                           of several thousand dollars in advance, or to agree                           to make credit payments instead. Reputable licensing                           agents usually don't rely on large advance fees. Rather,                           they depend on royalties from the successful licensing                           of client inventions. How can they make money when so                           few inventions achieve commercial success? They're choosy                           about which ideas or inventions they pursue. If a firm                           is enthusiastic about the market potential of your idea                           — but wants to charge you a large fee in advance                           — take your business elsewhere.

Inventor Protections

If you're interested in working with                           an invention promotion firm, here's information that                           can help you avoid making a costly mistake.
-  The American Inventors Protection Act of 1999 gives                             you certain rights when dealing with invention promoters.                             Before an invention promoter can enter into a contract                             with you, it must disclose the following information                             about its business practices during the past five                             years:                                -  how many inventions it has evaluated,
  -  how many of those inventions got positive or                                 negative evaluations,
  -  its total number of customers,
  -  how many of those customers received a net                                 profit from the promoter's services, and
  -  how many of those customers have licensed their                                 inventions due to the promoter's services.  This information can help you                               determine how selective the promoter has been in                               deciding which inventions it promotes and how successful                               the promoter has been.  
-  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. Some even                             offer to finance the full amount to entice inventors                             into making a quick decision. Reputable licensing                             agents rarely rely on large up-front fees.
-  Unscrupulous invention promotion firms tell  **all**                              inventors that their ideas are among the relative                             few that have market potential. The truth is that                             most ideas don't make any money. 

Check References
-  Ask the promoter to give you the names of many                             previous purchasers so that you can pick and choose                             who to call for references. Again, beware of shills.
-  Fraudulent invention promotion firms may promise                             to register your idea with the U.S. Patent and Trademark                             Office's (USPTO) Disclosure Document Program. Although                             many scam artists charge high fees to do this, you                             can do it for $10 by filing your document with the                             USPTO directly. 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 trade shows, but don't actually                             go to these trade shows, much less market your idea                             effectively. Check with previous clients and trade                             show sponsors about whether their ideas were exhibited.                           
-  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.                           

Tips Before Moving Forward

Contracting for the services of an                           invention promotion firm is no different from making                           many other major purchases. Apply some 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 USPTO at 1-866-767-3848, and the Better Business                             Bureau, the consumer protection agency, and the Attorney                             General in your state or city, and in the state or                             city where the company is headquartered. Under the                             American Inventors Protection Act of 1999, invention                             promoters must give you the names and addresses of                             all invention promotion companies they have been affiliated                             with over the past 10 years. Use this information                             to determine whether the company you're considering                             doing business with has been subject to complaints                             or legal action.                              If a promoter causes you financial                               injury by failing to make the required disclosures,                               by making any false or fraudulent statements or                               representations, or by omitting any fact, you have                               the right to sue the promoter and recover the amount                               of your injury plus costs and attorneys' fees.  In addition, while the USPTO has                               no civil authority to bring law enforcement actions                               against invention promoters, it will accept your                               complaint and post it online if you complete the                               form, **Complaint Regarding Invention Promoter**,                               at www.uspto.gov/web/forms/2048.pdf.                               The USPTO also will forward your complaint to the                               promoter, and publish its response online. To read                               complaints and responses, visit **Inventor                               Resources** at www.uspto.gov/web/offices/com/iip/index.htm. 
-  Make sure your contract contains all the terms                             you agreed to — verbal and written — before                             you sign. Often the contract says one thing but the                             salesperson says something quite different. If possible,                             ask an attorney to review the agreement. 
-  Remember that once a dishonest company has your                             money, you may never get it back. You may have to                             sue the company under the American Inventors Protection                             Act of 1999, which permits a customer to recover for                             injuries, costs, and legal fees if a promoter has                             failed to make disclosures, made any false or fraudulent                             statement or representation, or omitted any material                             fact, to a customer. You have the burden to show that                             the law has been violated.

For More Information
-  U.S. Patent and Trademark Office  The USPTO offers information about                               patents and trademarks. Write: U.S. Patent and Trademark                               Office, Commissioner for Patents, P.O. Box 1450,                               Alexandria, VA 22313-1450; call toll-free at 1-800-PTO-9199;                               or visit www.uspto.gov.                               For more information about the Disclosure Document                               Program, Provisional Applications or Non-provisional                               Applications call 1-800-PTO-9199. In addition, every                               state has a Patent and Trademark Depository Library                               that maintains collections of current and previously-issued                               patents and Patent and Trademark reference materials.                               To order a copy of the American Inventors Protection                               Act, call 1-800-PTO-9199, or visit www.uspto.gov/web/offices/com/speeches/s1948gb1.pdf. 
-  National Congress of Inventor Organizations  NCIO offers free articles, information,                               resources, and an online magazine **America's                               Inventor Online**. To contact NCIO, call                               toll-free 1-877-807-4074, or visit www.inventionconvention.com/ncio. 
-  United Inventors Association  UIA offers free articles, information,                               resources, referrals to local support groups for                               inventors, and online copies of its newsletter.                               To contact UIA, call 1-585-359-9310, or visit www.uiausa.com                               or www.uiausa.org. 
-  Federal Trade Commission                             (FTC)   *Produced in                               cooperation with the U.S. Patent and Trademark Office* 

The FTC works for the consumer to prevent fraudulent, deceptive   and unfair business practices in the marketplace and to provide information   to help consumers spot, stop and avoid them. To file a    complaint or to get free   information on consumer issues, visit www.ftc.gov   or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The   FTC enters Internet, telemarketing, identity theft and other fraud-related complaints   into    Consumer Sentinel, a secure, online database available to hundreds of civil   and criminal law enforcement agencies in the U.S. and abroad.
October                           2003 |
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