Avoid being Scammed by Invention Companies!

Invention companies are in the business of helping inventors get their inventions marketed. They act as an agent for inventors by submitting their inventions to manufacturing/marketing companies, who may consider entering into a "License Agreement" with the inventor. Should the invention company accomplish this for an inventor, they will either receive a percentage of the inventor's royalties, be paid a fee by the inventor, or both.

While there are honest and reputable invention companies available to inventors, there are also ones who simply scam inventors out of fees and do not perform the services they claim they do. I am an inventor who was scammed by an Invention Company out of nearly $5,000 before successfully marketing my inventions on my own.

Even the U.S. Patent & Trademark Office has information on their website about scam invention companies and they actually offer a forum for inventors to publicly register their complaints against invention companies who have scammed them.

In the steps below, you will find suggestions on how to guard against being scammed by dishonest invention companies.

Find out which invention companies are on a "watch list". There are many inventor information sources out there that help inventors avoid companies that have a reputation for scamming their clients. Simply use the search terms; "invention company scams", "invention promotion fraud" and "bogus invention promotion" on a search engine. Your search results will yield a great deal of information on how to watch out for these types of companies and many of these websites actually list the dishonest companies by name.

Consider using an invention company that works on a percentage/contingency basis rather than one that charges a fee. If an invention company you are considering works on a percentage basis, this gives you added security against scams. Under this condition, the invention company only has success and receives payment if they have success for you. This gives them the added incentive to pursue getting your invention licensed more diligently. Invention companies who are actually out for inventor's fees only, will sometimes sit on their clients' inventions and accomplish very little, despite the fact that they want inventors to believe that they are actively trying to get their inventions marketed through licensing agreements.

Do not contract with an invention company who downplays the importance of patent protection. Inventors who have been scammed by invention companies sometimes report that the firm told them that a patent was not really important and that they should not invest in one. This is a sign that you should not contract with a company. Patent protection is extremely important and your invention company should recommend that it be obtained before they ever publicly disclose what your invention is.

With the U.S. Patent Office's revised provisional patent program, the cost to secure a patent pending, is only $105.00 for small entities (individuals and companies with less than 500 employees). So, an inventor has very little to lose by securing a "patent pending" and possibly a great deal to gain from one.

Get a statement that lists the number of clients that have contracted with the investment company over the past five years and what the company accomplished for these inventors. A law was passed by congress in November of 1999 called the American Inventor Protection Act (AIPA). The AIPA requires invention companies to provide a list of their clients and the number of those clients that the invention company successfully licensed inventions for. If, for example, an invention company provided you this list and it showed that they contracted with 6,500 inventors over the past five years but their success rate was "0", this would be a strong indication that you need to search further for a more qualified, reputable invention company.

Another important thing to remember is to not rush the process of finding a reputable invention company because as the saying goes "haste makes waste" and this is true of finding a good invention company as well.