How to spot an invention promotion scam

Be wary of a firm that earns its money from you, up front, before any company has seen your invention. Federal law gives you the right to see its record in writing before you sign.

What the FTC warns about

“They’ll guarantee that you’ll make money when no one can really guarantee success — and the reality is that very few inventions ever make it to market or make any money.”

The FTC’s advice includes not paying in advance and not believing promises of a “global” patent, which does not exist.

One case

In its case against World Patent Marketing, the FTC reports that customers paid between $9,000 and $65,000 for a “10 Point Patent Protection & Publicity Commitment”. It reports no evidence that the firm ever had a review team, and a Target representative testified the firm had “no relationship whatsoever” with the retailer. The court’s order barred threats against people who complained. The FTC’s account.

Warning signs

• They love your idea. Ask how many they turned down. The law below makes them say.
• Payment first. A report, then a package, then a “presentation to industry”.
• Any guarantee of a license, a sale or a patent.
• Success stories without names. Ask for the product, the company and an inventor you can call.
• A deadline on the price.
• Rights before a deal. An assignment, or an exclusive contract with no performance clause.

What the law makes them tell you

Under 35 U.S.C. § 297, an invention promoter must disclose in writing, before you contract:

1. How many inventions it evaluated in the past five years, and how many evaluations were positive and negative.
2. How many customers it had in that time.
3. How many it knows made a net profit.
4. How many it knows received license agreements.
5. Earlier invention promotion companies tied to it or its officers in the past ten years.

A customer harmed by a violation can sue for actual damages or statutory damages of up to $5,000, and a court may increase the award up to threefold for intentional or willful deception. A firm that will not hand over these numbers has answered your question.

Where to complain

Report it to the FTC at ReportFraud.ftc.gov. The USPTO also takes complaints, forwards them to the firm and publishes both, so it will not accept one marked confidential. Search a firm’s current and former names before you pay.

The way that costs nothing

Many companies take submissions directly. Here is who takes them, with a sell sheet and your own follow-up.