Inventors Beware
By Jeffrey Dobkin
Some of the firms that advertise on TV are nothing more than scams that prey on inventors. Even more on the internet. OK, lots more on the internet.
They take your money saying they will “Submit your idea to industry.” After being in marketing for over 25 years, I still have no idea what exactly this means; I suspect it means nothing – er, other than they will take your money and do very little; after which they will do whatever they can to get more of your money if you are foolish enough to hang in there with them in the first place.
If you have invented a new plastic ashtray and they send a drawing of it blindly to Ford (to “Ford Motor Company,” & “To Whom it May Concern:”), does this mean they have now “submitted your idea to industry?” I suspect it does… to them. In reality, it would mean very little to you.
If you are thinking about spending any money with any marketing firm, you better be sure of EXACTLY what they are going to do for your money. If they tell you nothing but some fancy mumbo jumbo that doesn’t make a good solid action plan that you can track in writing – be aware that is exactly what you’re going to get after they have your money: some mumbo jumbo of something you can’t track.
Here at our own self-help group, the American Society of Inventors, we have people who have been blatenly ripped off by some of the “inventor assistance” companies. Some of our members (before they became members that is) have lost $10,000, $15,000 – $20,000 after all was said and done. For a pocket full of promises and lies.
So to help you see it coming, here’s a profile of what happens when an invention scam company speaks with you.
Here’s how it starts:
“No no no – don’t tell me your idea! First, I’ll send you a “document disclosure form” so you will have “protection!” they say on the phone. This is the bullshit that builds trust. They have no interest in stealing your idea. They don’t need to: they steal your money. It’s less work, their profit is immediate and it’s much more financially rewarding. They have little interest in your idea – so a non-disclosure is not a trustworthy event. Besides, I’ve never see a sheet of paper stop a crook.
So they sign a NDA, and you send in your idea…
Lo and behold they call you! “Wow!” they say, “your idea is incredible! Wonderful.” They continue: “Your idea just happens to be the best idea since a machine to toast sliced bread! And I get the feeling many, many folks will buy it! Wow, nice idea! But, just to be sure, we’ll have to do an “analysis” – but, your idea is so great I’m sure you’ll want me to go ahead with this step…” Yea, and the costs to you are $400 to $600, maybe more depending on what you told them your budget is or how excited you sound on the phone. This is their first step to help you with your “easy million dollar idea!” And help themselves to your wallet.
Usually more often than not they’ll want you to come into their office for the presentation. That is for ONE REASON: it’s hard to get money from you on the phone. They can’t stroke your ego. They can’t tell you how great your idea is and while your head is swimming with greatness, pick your pocket. And most of all, they can’t look directly into your wallet and see how much money you have or are willing to spend. They can’t do that on the phone. So beware of any firm that tells you that you must, must come into their office to talk with them because you’re going to get a high pressure sales pitch.
Meanwhile… So you say OK it’s just $600 and by some magic at least you’re going to get a market study. So here’s what you get: they give you some boilerplate (similar background copy that goes to everyone!) copywriting in a leather-bound book with strong suggestions about how great your idea is and how you should immediately move forward with it. Nice book! Real leather! So you say, “OK, look at what they gave me – and they are so entheusiastic!” Yea, that leather book cost you $600, and don’t forget – they get paid for being enthusiastic and telling you how great your idea is. And they’re really good at faking it. Really really good. That’s how they make their money. That’s how they fleece unsuspecting inventors out of their money.
Next, they recommend a “search to see if it’s a needed product, or if there’s anything like it on the market place.” This may or may not include a “patent search” Fees for this segment are $2,500, $5,000 perhaps $7,000; maybe more if you seem to be rich, or a willing enough subject. (Ever see the movie “Boiler Room!”)
Patent searches from reputable companies usually run $500 to $1000 for an initial search. If you’re a large corporation, a deeper search may run more. These are done by specialists. You don’t need a $5,000 search unless you have deep pockets (like millions)… and have the need to throw away five grand. If this is the case, let me know and I’ll give you my address so you can throw some this way.
Now a patent search may be one of the things you may need at one point or another – but I wouldn’t do this now, and certainly not with some firm you saw on an ad on TV. I’d go to a local patent agent or patent attorney and discuss your need with him or her. But even that is putting the cart before the horse. You don’t need a patent just yet.
I wouldn’t recommend you even think about getting a patent – which may cost you another $5,000 (for the patent, not just the search) – until you get figure out if your product is a viable commercial product. You can get this done at the WIN Innovation Institute, and the cost is about $175. This will tell you if your product will SELL. Or see my article about assessing a products “commercial feasibility.” Can you make it and sell it at a profit? For a price people will want to buy it? If it won’t sell, you won’t need a search – or a patent. No one will steal it. No one will want it. It may be a great idea, but if it won’t sell you can’t make any money from it. A patent will then be an expensive $5,000 piece of paper you can hang on your wall.
But meanwhile, back to our story. After the invention-scam marketing firm tells you how great your idea is, and presents you with this their stock book of how great your invention is, citing how it’s needed so badly in almost every industry, and how your successful product is going to be the world’s next third taillight and is likely to be on every car in the US – they’ll only charge you another $7,000 to $15,000 to “submit it to industry” by creating a press release and sending it to “Hundreds of their manufacturers who are in their database and looking for new inventions just like yours!” If you bite, they create a press release and send it blindly to a few hundred manufacturing firms.
My firm creates press releases, and the cost is $500. Press releases aren’t used as a marketing tool to manufacturers because… they don’t work. They aren’t marketing tools to manufacturers. They are press releases sent to the press – magazines and newspapers. I’ve personally NEVER seen a press release sent blindly to a manufacturer then the manufacturer buys the rights to the product, manufacturers the product, and pays a royality to the inventor. And I’ve been on the Board of Directors for the American Society of Inventors for over 15 years. It just ain’t happening. Nothing’s that easy.
So far – if you’ve bought their bill of goods, you’ve probably spent about $10,000 to $18,000 with the firm, and now you’re seeing that they are just ripping you off. Too late. They no longer have any use for you either – and at the first sign of you balking at their new bills – they cut you off of all communication rapidly and rather rudly. Did I mention their bills keep getting higher – as you’ve already made an investment in money and time, and you feel you’re committed – you don’t want to lose what you’ve already put in.
They don’t say to you “Frankly, it doesn’t look like you’re going to give us any more money so get lost.” They say, “We tried our best. Sorry – your product won’t sell, we’ve tried!” Not even a “Say, thanks for all the money you’ve sent us – we’re having a really good time here in Hawaii – eating at all the best restaurants, staying at all the best hotels! And we can’t wait to drive that nice car we bought thanks to you and people like you!” They may say, “Hey, we still think your idea is good – if you’d just put a few more thousand into our pockets we’re sure someone will pick it up! Come on – you’ve gone this far!”
So, you’ve figured it out. They are liars and thieves. And they’re really, really good at it.
How do you get around this? Simple. Ask for references. They do this for a living every day – ask for a dozen people they’ve recently made money for. No references? Ask for their disclosure to the Inventors Protection Act of 1999. By law, they must disclose how many people signed up with them, and how many actually made more money that they paid them. Without these elements, you’d be a fool to hire them. Then hang up, and run away. Then consider yourself one of the lucky ones who got away.
Invention Fraud, part II
OK, here’s what happens when you call the new breed of invention fraud scam rip-off artists, the predators of the invention industry.
“Oh, don’t tell me your idea!” they say right up front. “First, let me sign a non-disclosure agreement. That will keep you safe!” This builds trust. So they send you one and you sign it, thinking you’re safe.
Then they call you, after they received it back from you. “OK, you’re safe – what’s your idea?” You mention the idea. And the conversation goes like this: “What?” they say. “I can’t believe there’s not a million of those sold every year! That’s incredible! Really. That’s the best idea I’ve heard since the toaster! You invented that? Really? Wow – you better come in here right away and start working on it – before someone beats you to it!”
Yes sir, you and your darn tootin’ hot moneymaking idea are invited down to their office because, well – they can sell you anything once they have you in their office. They can’t really sell you much over the phone. If you go – expect the full court press. High pressure sales. Just make sure to leave your wallet at home. Cause you’re going to get both barrels of the highest pressure sales pitch you ever got. Here’s how it goes.