Invention Promotion Companies
Ah ... the vexed question of invention promotion companies. Often compared to vanity publishing, some demonize them, others eulogize. I have met people who are very happy with the service they received and others who are very disgruntled. What's the truth?
It is important to understand what an invention promotion company is. The premise is very simple. In return for a fee, a promoter will attempt to find a commercial partner for an invention. Some offer other services such as market research and improved presentation materials. Some have large databases from which they organize mail-outs to potentially interested parties. Very few of these companies work in partnership with the inventor - everything is fee-based.
Lots have come and gone over the years. Some are home-grown, more usually they are based in the United States, but there are also a few in the Far East. Some work by word of mouth and others engage in high-profile advertising campaigns. Some are large organizations and others are 'one man bands'. They strive to do the same thing, namely to put their clients' inventions in front of those who can take them forward commercially.
So, why does such a simple business model give rise to much argument and polarization within the international inventor community? Essentially there are two bones of contention. First, rarely does an invention promoter vet or assess the commercial worth of the inventions presented to it. Second, they have low success rates in actually making money for their clients. I have some sympathy with both arguments.
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I have questioned invention promoters as to why they do not assess inventions, and the answer is very simple. They do not feel that it is their job, because if the inventor truly believes in the idea, it is up to them how they attempt to bring it to market. From my own point of view, I can confirm that it is very difficult to assess the worth of an invention. In this business there are many examples of inventors being told that their idea was going nowhere who have then gone on to prove their detractors spectacularly wrong. Conversely, over the years I have seen many inventions that, on the face of it, had bright futures, but failed to get to market for all sorts of unexpected reasons. Therefore an invention promoter would look fairly silly if it turned away clients who went on to be successful, and it cannot be expected to second guess whether a potentially good idea will fail for unexpected reasons. This is a form of Catch 22. There is also the problem of the inventors themselves. Every inventor is convinced that his or her idea is 'the one’ and will brook no criticism.
As far as low success rates are concerned, I can only say that I am not surprised. Unfortunately, low success rates go with the territory. It is a sad fact that only 3-5 percent of inventions patented by individuals ever make it to market. Add to this the fact that there is no assessment of the invention, and some invention promoters' figures begin to look quite reasonable. A reputable invention promotion company will warn the inventor that his or her chances of success are slim. It will also provide a contract which gives the inventor the opportunity to really think about what he or she is doing before signing on the dotted line. A 'cooling-off’ period should be provided.
Inventors really need to think about whether using the services of a promoter is the right approach for them. If the inventor is the sort of person who wants to be involved with every stage and negotiation of the commercialization process, and actively wants to go out to promote the invention, then this route is probably not the right one. In talking to some American inventors I have noticed a few cultural differences in approach. Many US inventors have stated that they 'had a bit of an idea' which they wanted to do something about. It is almost an itch that must be scratched. However, they are so busy in getting on with their normal lives and careers that they cannot take the time out to work on their invention. These people are money rich but time poor. In this case they use the services of an invention promoter, taking the view that for a fixed fee someone else does all the work. If the invention goes on to be successful, that is great. If it fails, at least they tried.
A few practices give me some cause for concern. Anyone entering into a contract with a company that has a UK office has some protection through the Trading Standards Office. However, I am aware of one company that routes telephone enquiries to another EU country which are then re-routed to the United States. This company gives the impression that it is UK-based, but it is actually outside any UK jurisdiction. Another practice that appears somewhat underhand is to advertise services under the guise of 'help lines' or the promise of 'information packs'. This gives the impression that it is information from some sort of government agency or inventor organization, rather than for the sale of commercial services.
Is it all bad? No, of course not. Some companies have dramatically improved their services in recent years, with the provision of real information about success rates, and much improved contracts that give the correct warnings and allow potential clients to review their options. I have met dedicated and enthusiastic people who do their best to promote their clients’ interests and ensure that they satisfy any contractual agreements.
The following is a set of guidelines to help inventors decide whether using an invention promoter is right for them. Taken individually these guidelines make good sense; however, collectively they might seem a little draconian.
Step-by-step guide to using invention promoters:
Do you think you have a great idea for a new product or service? You are not alone.
Every year thousands of people try to develop their ideas and market them commercially. Some people use the services of invention promotion firms to help evaluate, develop and market their idea. Contracting for the services of such firms is no different from making any other major purchase. If you are interested in working with one, before entering into a contract, the following common sense guidance may help you to avoid costly mistakes.
Do your homework - there is a considerable amount of free or low-cost advice available, on issues such as patenting and other forms of intellectual property protection, which you may wish to consider first. A few of these sources or routes to information are suggested below.
Do not disclose the details of your invention to anyone, including the promoter, without a prior confidentiality agreement. Failure to keep the details private could prevent you from obtaining intellectual property rights in the future.
Early in your discussion with a promotion firm, find out exactly what the different stages of the service are and the costs associatedwith each stage, from the 'research' about your invention right through to the marketing and licensing.
Ask the firm to provide evidence that it has the necessary skills and expertise in the field of your interest to support the activities that they agree to carry out on your behalf.
Ask what success rate the firm has achieved in promoting inventions since it started offering its services, and find out whether references can be provided from recent clients.
Question claims and assurances that your invention will make money. Commercialization of inventions is a risky business - no one can guarantee that your invention will be commercially successful.
Ask the firm for its rejection rate -the percentage of all ideas or inventions that the invention firm finds unacceptable at the first assessment stage. Not all ideas could be considered to be commercially viable, and it should be expected that firms have high rejection rates.
Find out whether the services advertised, for example the patent search and/or market assessment, will be carried out in the countries in which you would like to exploit your invention.
If the invention promotion firm claims to know, or have special access to, manufacturers who are likely to be interested in licensing your invention, or if it claims to represent manufacturers on the look-out for new product ideas, ask for proof.
If the firm offers the services of a 'patent agent' or 'patent attorney’, ask if those people are registered. The Chartered Institute of Patent Agents (CIPA) is the professional body for patent agents in the UK. It aims to increase awareness and understanding of the innovation process by providing a basic information pack and free clinics, and by arranging talks or seminars when appropriate. CIPA members help inventors to obtain protection, not only in patents, but also in trade marks, designs and copyright. For further information www.cipa.org.uk.
If the firm offers search services to assess patent prospects, make sure that the search is comprehensive and covers all published prior art. A patent must be new, and if the idea is published anywhere in the world before filing, this will invalidate rights.
Compare the cost and thoroughness of the search with that provided by the UK Intellectual Property Office. If at the end of all this you are happy with the evidence and do wish to enter into a contract, ensure that it contains all the terms you agreed to - verbal and written - before you sign. If possible you should seek legal advice.
Editors note: A version of this article originally appeared as a chapter in:
A Handbook of Intellectual Property Management: Protecting, Developing and Exploiting Your IP Assets
by Adam Jolly, Jeremy Philpott
Kogan Page Publishers