Access Inventor logoHave an Invention? Do you know how to protect yourself from being ripped off by the bad guys?
Our Guest Blogger, Terri Phillips, is an inventor of numerous products. She has worked at an Invention Promotion Firm. She now works in marketing, packaging, and product development for an inventor service company that provides a means of distribution for inventors to sell their products through AccessInventors.com. Terri's goal is to educate inventors from the inside out, so she wrote this article exclusively for the readers of AmericanInventorSpot.com.
Here's her article:
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Did you receive a colorful postcard asking about your invention?
Did you open a letter congratulating you because your patent meets the qualifications for an Inventor Investment Fund?
Did your neighbor hand you he number they heard on some commercial for inventions?
Did you find a phone number in the classified ad you read on the back page of the magazine?
It's understandable that you're excited and you want to move forward with your invention. But before you do anything with a company, SLAM ON YOUR BRAKES! You could be calling a disreputable invention submission company or an invention promotion firm ("IPF").
It's important to figure out whether or not you are calling the bad guys.
Go ahead, make the call, but be alert and investigate everything they say. Qualify the company or person you are considering as a partner. Before they even say "let me get your name and phone number to set up an appointment with a product selection person" (who, by the way, is a well trained sales person), ask the person you are speaking with a few basic questions. It may take time to get them to answer, but you should invest the time to do this before you invest any money! Be persistent, stay on hold if you have to, but get the answers you need. If the person who answered the phone cannot provide you with answers, ask to speak to a manager or supervisor.
When you call, don't be defensive or have a bad attitude. Just act like an informed businessperson. When calling, be careful to NOT reveal your idea, especially if you do not have a patent or a provisional patent.
Here are some critical questions you should try to get answered:
1) What is the full name of the company?
2) What is the company's address?
3) What is the President's name? Does s/he work at this location?
4) What is the company's website address?
Answers to questions (1) through (4) reveal what you need to know to research the company at the Better Business Bureau and the USPTO Caution List. Keep in mind that a company with two (2) or more complaints is probably a company that you may want to speak with a few more times before working with them. Companies who have a couple of complaints against them may not necessarily mean they are the bad guys. All companies have one or two unhappy clients no matter how well they generally perform for their clients. But double digit complaints may be indicative of a problem and you should be cautious in considering whether you want to be doing business with them.
5) What is the company's primary service? Is it "finding" manufacturers to license your patented invention?
6) How many clients do they have? How many products have they licensed/marketed in the past year? What are the names of the product? Who are their client and business references?
7) How many product licensing managers, product selection managers (aka sales people) as well as total employees work at the company?
8) What is the length of their typical contracts and/or agreements?
9) Which tradeshows that are coming up will they have a booth exhibiting their current client inventor's inventions? What is the number of the booth?
10) How many "client inventors" inventions will be showcased or marketed? And if they are showcased, how will they be represented?
Answers to question (5) through (10) are critical. If you have reached the bad guys or simply ones that may not fit your objectives for your invention, the answers to these questions will provide invaluable information.
Question (5): By asking about the primary business of the company, you know immediately what's on the table, especially if it is your intentions to have your product licensed rather than seek other and potentially more lucrative product development options.
Question (6) and (7): Knowing how many clients the invention promotions firm has is crucial to your understanding how much effort they may or may not put into your invention. The same applies to how many product-licensing managers they have. Let's do the math: if a company has 15 product-licensing managers divided by 500 clients, this equals 33.33 clients per product licensing manager. This product-licensing manager is working for 33 other clients besides you. In a month of 31 days there are 22 working days. This means that they spend one complete eight-hour day promoting your invention. One day! Will their efforts justify what you are going to pay them for their efforts? Do not be impressed by the sheer number of employees the IPF Company has, look at how many people will be working directly on your behalf.
Question (8): Asking about the length of the agreement is another way of segregating the bad guys from the good guys. The companies who push for signing invention marketing promotion license contracts for 6 to 9 months and charge over $5,000 should be immediately crossed off your list. For disreputable companies, the goal is to have you sign a contract and to take your money without providing much in return. Thus, once you've paid your $5000 to $15,000, it costs them more money to have you as a client for 12 months or longer. As they are not likely to be successful in obtaining a licensing deal for the products they handle, they have every reason to look for a short contract with you. Since less than 3% of patents ever make any money for the inventor, the less time they need to spend on an invention for each contract they sign, the better the deal is for the IPF.
Question (9): These IPF's do not want to spend any money to make you money. Normally, IPF's do not want the expense of exhibiting inventions at tradeshows, including sending a product-licensing manager for a day or two to walk the tradeshow. This is why you have to ask whether or not the company will be representing its clients at the tradeshow that are a good fit with your invention category? If so, how many booths will they have at these tradeshows and what are their booth numbers? Once you know the booth number, confirm through the tradeshow's website or the tradeshow representative that your prospective partner (or their parent company) is listed in the exhibitor directory. If an IPF has a list of tradeshows in their literature and on their website, and they actually will be featuring products at the shows, they should be eager to promote their booth numbers in order to attract visitors.
Question (10): Determining how many actual and current clients inventions will be showcased at the tradeshow, as well as how they will be represented, will provide an indication of the IPF's creditability. Plus, it lets you see the effort the company puts into launching inventor products and helping the inventor recoup his/her investment dollars. You should be careful to check out the products showcased, as a few of these IPF's are putting non-inventors products in their booth and misrepresenting them as client products. If you can, find out the story behind the inventions. Remember, inventors and their partnered companies love to talk about their inventors and their products.
Asking how the IPF plans to represent your product at a tradeshow will either have them excited about their efforts or tongue-tied. Their level of enthusiasm and details about the shows they plan to feature your invention in will be helpful in determining whether or not they will be providing a valuable service to you.
It is prudent before you sign up with an IPF that you ask some tough questions, and follow up to make sure their answers are backed up by the facts. Hopefully, this list will be a helpful starting point for the investigative work you need to do before you sign a contract and pay to help get your invention marketed.