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Short Tips for Inventors Series: Fraud

Short Tips for Independent Inventors, Series: Fraud
Jeffrey Dobkin

Don’t trust invention marketing companies.
Sadly, the inventor industry is plagued by fraud. Fraud is a deception deliberately practiced in order to secure unfair or unlawful gain.

Most of these firms are really very bad people without conscious or morals.  They DO NOT want to steal your idea – but they do want to steal your money.  Some are very smart and ruthless, and very smooth at bilking inventors out of their money.  Sometimes the inventor’s life savings are at stake.

The invention industry was so infiltrated by rip-off artists and fraud, a law was passed to try to prevent these criminals from preying on innocent – and enthusiastic – inventors.

By law (The Inventor Protection Act of 1999), any invention marketing company must show you how many people have made more money from selling or licensing their invention than they have spent with the invention marketing firm.

If the invention marketing company personnel are reluctant to give you this figure easily and UP FRONT, and in writing – they are the bad guys. This should tell you to run away.

They all start out the same way:

To build trust, they say “No, no, no, no… don’t tell me your idea. Just so you’ll be safe, let me send you an Non-Disclosure Agreement.” They do this so you’ll trust them – and feel comfortable that they won’t steal your idea. Which they don’t want.  They want your money.  Then they invite you to meet in person at their office, because: they can’t get any money out of you on the phone. Can they?

At the meeting, “Wow – your idea is GREAT!!!”  Everyone, everyone there tells you how great your invention is!  Yes, everyone in the company goes into the same dance: your contact person (the salesperson they call the “product developer,”),  then his manager, and then OMG! even the vice president tells you how great your product is!!!  And, low and behold, the president comes in and he thinks your invention is amazing, too! In fact, they all think your invention is the most amazing thing since the toaster! And now they tell you – how they’d like to help you market it because they think you’re going to make so, so much money….

At this point, your head is spinning, and you are all smiles and glowing with their rave reviews of your invention.  A whole team of people loved your baby!  You’re great, your invention is great, and they are great because they loved your great invention.  There’s a real dance going on here…

How happy you are – and when you’re smiling, grinning ear to ear – you are ready to sign anything.

So everything from that point on they use every trick in the book to high pressure you into buying thousands of dollars of worthless services.  And the charges?  Incredibly high fees. But hey, “so what!” you’re thinking – because you’re going to make so much money in just a few months because your invention is so great!  Hey, you laugh, but some firms are so smooth you never feel the knife until it’s too late.

Here’s their high pressure sales pitch for:

1. The Bogus market study:

· A big leather bound book worthlessly filled with stock boilerplate information with a sprinkling of marketing gibberish.

“Oh look!!!” they’ll tell you, “your ‘so and so’ industry is a 25 billion dollar industry – if you get just 1% of that, you’ll be rich!”…

The Bad news: you won’t. Because that’s not how to assess marketing to an industry, or figuring out what you will earn. If that worked, everyone entering a big market – like the automotive industry – would be rich, wouldn’t they?

2. Worthless drawings. Because of the heavy government pressure, today’s invention marketing firms have come up with new ways to fleece inventors that looks legit, but the services are highly priced, poor quality – and sold with a bill of goods that it will help inventors “Show the world” of how great their invention is.  Fraud comes in the way of misleading the inventor into believing the value of their services will really help you to market or license the invention.

You’ll be offered extremely high priced computer drawings. Yea, they are real computer drawings, but holy cow, the prices you’ll pay – ten times, twenty times greater than what you would be charged from an artist or better yet, an art student.

Note: If you really want engineering drawings, go to any large university – to their prototyping or cad-cam department in their engineering school.  Some universities will make your product for FREE.

It becomes fraud not because they don’t do the drawings, but because the drawings don’t help the inventor sell or license their invention.  So when proposed as “you really need these drawings to help us license your product” and they don’t, it becomes a grey area of fraud that can be tough to prove in court.

The PROOF is in the percentages – how many inventors sold or licensed their products directly from the efforts of the firm, and made more money than they spent with the invention marketing firm.  That is the question you need to ask.  And if they don’t have an answer, if they dance around answering you; or if the numbers are horrific – like less than 1/2 of 1 percent made money – walk away.  Some firms boast that some people have indeed made money from their services!  Then if you look closely, that figure can be as low as .0005%.  And they amount they made can be just one dollar more than they spent.  And the person who made money?  Was it recent, or was it back in 2006?

If the firm actively markets inventions for clients, they should have a hugh list of RECENT successes. You need recent examples for references, and phone numbers you can call.  And now – with pay-per ads, if they show you ads on TV, keep in mind that’s no signal of success: the inventor paid for an ad schedule.  And while the channel was broadcast into 50 million homes, no one watched the pay-for-ad channel on cable channel 1587.

3. Worthless drawing posted on their website. Your product page will have no visitors, certainly no buyers. Your invention will be clumped in with other people who got ripped off from this worthless – and expensive – service.

4. A Cursory patent search. Real patent searched can be thorough, exhausting. You won’t get that. The fraudulent invention marketing firm will charge you whatever they think you’ll pay. And the search can be completed in under a half hour – which will be totally worthless.  If they offer a search, ask their hourly rate and how many hours a person will spend searching the files.  And what credentials the searcher has (Attorney, patent agent, or a part time searcher with no credentials?)

5. Cheap, yet highly priced brochures. What are you doing to do with these? You’re an inventor, not a marketer.  A brochure doesn’t do you any good if you have no product that is already manufactured to sell.

6. Poorly drafted press releases – all shoddily written and they’ll charge you heavy, heavy fees. Unless you know exactly what to write in a press release, chances are doesn’t do any good.  And unless you know exactly what to do with a press release – and even lots of large firms don’t – you’ll have more worthless material.

7. They’ll “send your press release to all the top firms!”  Yes, they’ll send it to a few, maybe even a few hundred firms.  I’ve been in marketing for the past 25 years, I’ve written 5 books on marketing, and I can personally assure you this is NOT an effective marketing technique. That isn’t what a press release is for, and it’s certainly not an effective marketing vehicle when sent to firms to alert them of your invention.  Nor is it the way to introduce your product to firms.  Please see my member article on INVENTION SUBMISSION to private firms on this site.  It’s worth the hundred bucks a membership costs, just to read this article.

8. They promise to “Alert the Industry! of your invention.” Whatever that means. I’ve been a marketer for 25 years and I still don’t know what anyone means when they say that. While I may not be the sharpest tool in the shed, if I don’t know what this means, they probably don’t either. It’s bullshit.  Call it that.

What can you do to protect yourself?

Ask for their figures: How many people made money from their invention – more money than they spent with the firm. The law says they need to disclose this figure to you.  Demand an accurate answer in writing.  IN WRITING.

Ask for REFERRALS of people WHO HAVE MADE MONEY from the company. And how much – a general range of their profits is fine: fifty bucks? A few hundred? A few thousand?

Write down names and phone numbers (and addresses) – and call them. Ask two questions: “How much money they spent with the firm!” And “How much money in actual income did they receive from their investment?”

If a company has hundreds, thousands of inventors they deal with, they should be able to come up with a few DOZEN names, RECENT names, of people who made money. If they dig back in their files to customers who made money in 2006, what does that tell you? Not one customer in the last 8 years made money.

Anybody can fake a review on-line with glowing praise, of how “nice they are to deal with.” “How they answered my questions,” and “How they created a great drawing on their website so I could see my invention come to life.”  So what. If you want something to make you feel good, buy a dog. If you want a drawing of your invention, hire an artist at an art school – it will cost you ONE TENTH the cost.

You need to see this: “how many were sold.” You need to know “How much money someone made!” in a real $$$ figure. How much they spent, and how much they made. Don’t accept a single isolated case as anything but an accident.

If you hire an invention marketing firm, they don’t need to upsell you 3-D cad-cam drawings for $3,500 – or more! They need show you exactly how they will generate sales for you, and a drawing on their website won’t generate sales. They need to show you exactly how they spend your money in their campaign for you, and how they will make money for you, and how they did it for many, many of their other clients.

Because I guarantee you this: they did NOT make money FOR other clients by selling them drawings and posting the drawings on their website. They made money FROM other clients by selling them that crap.  If they did make money for someone, it was a freak accident and an isolated case. Get the figures, get the percentages – they have to show you – it’s the law.  In writing.  They don’t want to disclose this?  It’s illegal. You need to get it – in writing.

OK, enough about invention scam companies – I just get so pissed off because they steal so much money from innocent inventors, providing worthless – worthless – services in return. They bilk them out of their life savings – I know, because I’ve seen it firsthand. I talk to people all the time that have been ripped off: $10,000, $15,000 – even $25,000 pissed away with worthless fluff, lousy press releases and a phony marketing dance fill with hype, smoke and mirrors. I’ve seen an 85 year old man swindled out of his life savings of $11,000 for a set of worthless computer drawings on a website, and sold a dream of success filled with further worthless services.

I am so sorry for these inventors – good people with ideas and dreams. If you have been ripped off, please see other articles in the member areas of this site for some support on what you can do… Sorry for my rant, I just get so mad…

Anyhow, please close this page or Click Here to read the full article: 15 Short Tips for Inventors.

After serving on the board of directors for 14 years, Jeffrey Dobkin is the President of the American Society of Inventors, a 501c3 nonprofit that helps inventors free of charge.

Jeffrey Dobkin is a fun speaker and a specialist in direct response copywriting. Jeff is the senior writer at The Danielle Adams Publishing Company. His firm offers marketing strategy, creative writing and design of direct mail, letters, brochures and booklets, website and article copywriting. They also write press releases, and offers PR planning and campaign strategy. Jeffrey has written 5 books on effective marketing methods.  Call 610-642-1000 to order his books or for a free 20 minute consultation.