Aspiring inventors, innovators and entrepreneurs should be careful when dealing with invention promotion companies. While there are many legitimate invention promotion companies, there are others that may be unscrupulous and operate fraudulent operations. A qualified intellectual property attorney can keep you from dealing with these bogus invention promotion companies.
What is Inventor Promotion Fraud?
Inventor promotion fraud or invention promotion scams is a common example of intellectual property fraud. The scam involves a promoter or company that persuades an inventor to pay money for a promotion or development of their invention that does not happen. The scammer may take the invention, trade secret or patent and use it for themselves. In other cases, these scammers provide inventors with false hopes about the potential upside benefit of obtaining protection for an invention. Put another way, these scammers sell inventors on the idea that they will get rich from getting patent so that they can charge a fee to help the inventor obtain the patent.
Illegal invention promotion companies have taken millions of dollars from inventors and entrepreneurs. It is important to create an effective intellectual property strategy for your IP marketing. The warning signs of a fraudulent invention promotion company may include:
- Asking for an upfront payment for a promotion or development service
- Exaggerated promises of success and profitability of an invention
- No credentials or identification
- Failure to provide information in writing
The American Inventors Protection Act of 1999 provides inventors with certain protection when they are working with invention promoters. The law requires invention promoters to disclose the following information before he can enter into a contract with an inventor:
- The number of inventions the promoter’s service has evaluated
- The number of inventions receiving positive or negative evaluations
- The total number of customers that use the promoter’s service
- The number of customers who gained a net profit from the promoter’s service
- The number of customers that have licensed their inventions using the promoter’s service
The USPTO is not involved in legal actions against invention promoters and promotion firms, but it does provide a public forum for complaints regarding invention promoters and promotion firms. These responses are published on the USPTO website for the public to view. Individuals can learn about companies that have been investigated or fined by the Federal Trade Commission by visiting the FTC’s website and keying in the word invention.
Invention promotion scams should be reported to the appropriate authorities. In addition to the protections offered by federal law under the American Inventor’s Protection Act, many states have enacted their own laws to stop invention promotion scams and companies. Legal solutions for intellectual property fraud may include monetary damages to inventors and entrepreneurs for losses caused by the fraudulent activity. The perpetrators of the fraud can face criminal fraud charges in many cases.
Contact an Attorney for Help
IP fraud experts suggest that you do your research on any person or company that you are considering to help you promote your invention or product. You may want to hire an intellectual property attorney who can provide advice on developing an intellectual property plan for your invention or business. Ideally, the attorney who develops your intellectual property plan will not have a financial interest in whether you actually seek to protect your intellectual property assets.