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April 2007 — Vol. 85, No. 3

SMALL BUSINESS

Beware of fraudulent invention-promotion firms

 

If you are considering using the services of an invention-promotion firm, proceed with caution. Some of these firms are reputable. But, “Unfortunately, many of these firms do little or nothing for their fee,” warns a Federal Trade Commission (FTC) fact sheet.

“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 FTC says.

Before engaging the services of an invention-promotion firm, the agency advises knowing your rights and thoroughly checking out the firm’s credentials and references.

According to the FTC, “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

  • How many of those customers have licensed their inventions due to the promoter’s services