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How to Figure Out if You Just Called the Bad Guys

Access Inventor logoAccess 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.

Terri Phillips
Guest Blogger
AmericanInventorSpot.com

Comments
Oct 28, 2006
by Roger Brown (not verified)

Right on the money!

Terri,

Thank you for giving Inventors great information they can use to spot the long list of rip-off Invention Submission Companies. I have been fortunate to not have to use any of these companies to get my inventions to market. A week doesn't go by that I don't either get a call or a letter from some invention promotion company. I have yet to have any of them be able to answer even half of the questions you listed.
Your article is one that every Invebtor should print out and keep by the computer or phone so they don't forget.
Thanks for trying to help Inventors get off on the right foot. : )

Oct 29, 2006
by Terri Phillips (not verified)

Thank You for the compliment Roger

Roger,

I commend you for your efforts as well. I too get piles of mail a month from Invention Promotions Firms known as well as Invention Submission Companies monthly regarding my inventions. I did use one in Kansas and lost $32,000 (I thought I did my homework, but failed myself), a rude awakening a couple years back, which prop me into INVESTIGATION MODE and to be an advocate to DO SOMETHING about these scam companies. I actually worked for one in SFO to get informed - which indeed I did, to the point I was sick daily for the four + months I worked there. I've had people tell me to not mention the SFO company name or all the other ones I have investigated because I can be sued for slander. I say "Fine!" I don't have to name them in my articles...I can fight the good fight, I will write until my fingers fall off to educate inventors and businesses not to use these companies.

What truly saddens me is inventors are not filing complaints against these companies and the USPTO is not keeping an up to date listing of complaints on their website!

My next project is to write each congressman or woman and make them aware of the millions of dollars being scammed from our economy and the welfare of other countries due to the bad guys running these invention promotion firms. There are great inventions out there that will never get to the marketplace because of the bad guys taking advantage of inventors.

Companies like mine (Practical Enterprises / Access Inventors), the good product developers and marketers fight daily to speak up and educate these inventors, but truly we need more help!

Terri Phillips

Mar 29, 2007
by Paul & Laurena Jerez (not verified)

RE: New Idea from Individual and Remarks

Teri:

After reading your comments above, we realized that maybe we should do some homework re:   Invention Promotion scam artists.   We recently sent in a "Confidentiality Agreement"  to Davidson Inventegration" and are suppposed to be contacted by the Product Developer this morning.    Do you know anything about these people?   If, we decide not to go with this company (let's say they ask for money up front), which we do not have, is there a company who would consider taking the idea of ours, put the money upfront to produce this product (which we think is a very good idea and a new one at that), it wouldn't cost much to produce it, we figure not more than $2.00 per unit, and really help someone who has little of nothing to run with the idea.

May 26, 2007
by Ken - Ohio (not verified)

Davison

Davison Design and Development has been a blessing for me to work with - they did the research to start and then developed my product for me for only a fraction of what some of these prototyping firms want.  Also - now my product just got licensed and I will be receiving my first royalty check on June 30 !!!!

May 27, 2007
by Michelle
Michelle's picture

Ken from

Ken from Ohio:

Congratulations.

Since there is heavy skepticism of Davidson Design on the part of many inventors who visit this site, I wonder if you would tell us your full name, your patent and your invention name so that our readers can all know more about your product?

Could you also detail out what they did, the costs, and what prototypers you had talked to and the costs they quoted.  It would be wonderdully helpful for our readers to have this information.

Thanks,

Michelle 

Jun 16, 2007
by Bonnie (not verified)

Davidson

I would be willing to bet that you won't get the name of the person talking up Davidson. Go to the uspto.gov site or the FTC website and look them up.

Oct 9, 2007
by Anonymous (not verified)

davidson inventegration

i have been contacted about my invention from this company i am not shore if i should use them . idont really know much about this kind of thing.can someone give me a suggestion. if this is a good company. i did do a little research and came up with two law suits against them but they were from 2006 dont know if they changed there ways or not. someone please help. thank you.

Feb 4, 2008
by Danny (not verified)

Piece of mind

Hi my name is Danny I have been dealing with davison for about 6 months I would appreciate any info you could give me about your dealings with them, please contact me asap. Thanks and looking forward to hearing from you.

Jul 3, 2008
by Anonymous

Davison Inventegration Former Insider

Davison D & D puts its best foot forward when it comes to your product idea but please be aware that these royalty check are small and can takes years to recoup the $$$ spent on your product developement in some cases. Going through a patent attorney alone can cost 4K-10K just for the patent research/application/filing. Developing your product with a general design firm can cost 75K-250K; and this doesn't include presenting it to companies. You can file a provisional patent on your own for $10 w/ the USPTO. Just as your Director at Davison about the conversion from actual developed product to a licensed product (less than 5% out of thousands serviced). Its all in the numbers which have to be made public b/c of the FTC ruling. But your product could be the next BikeBoard or Hoover Board.....who knows......but all invention help firms are sketchy. With that said, although Davison's conversion ##'s are low, surprisingly they are still the best in the industry which speaks volumes about the industry. In short, if I had $700 for a PI, $1,000 deposit on a $8,000 to $15,000 product developement package, and $375 for repackaging the product for each time they present it to a different manufacturer would I use my former employer............Yes & No......b/c I've seen the success stories 1st hand but the unsatisfied customers out number them 100 to 1. Not everyone is gonna get a licensed product......but its a great place to work $$$$$$$......fun environement.

Aug 14, 2008
by Anonymous

Davidson inventegration

I to have researched the Davidson group and i dont feel very comfortable with the results, a firm that wants money every time you speak with is very questionable there is other ways to market/manufacture an item with out this type of pressure .I will keep you posted on the method i am currently using that give results .You will see another suit real soon that will stick better than super glue.

Sep 2, 2008
by Anonymous

Davison- Who else?

I am also in conversations w/ Davison. We are at the "Prototype" stage and they want a considerable amount of money. They say they have a company who is interested but has NO interest in conception, they want a prototype. This is a very simple design w/ no moving parts, etc and I am wanting to know what other companies I can contact who may provide this service. ALSO- Can you do this yourself via infomercials?
All help is appreciated!

Jan 8, 2009
by Anonymous

So much for that

I had planned on progressing with this company, but after some online research, the bad outweighs the good by tremendous proportions. Just search for yourself and you'll see that, while SOME do make it to the point of profit (5 total customers listed on their sites), the reality is that you can save the 10-15 grand and do the leg work yourself. Davison has had more than enough bad press. Just check out Forbes.com, Ripoffreport.com, and the forums on this site. Not the warm and fuzzy feeling you'd expect when paying that sum of money.