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WinTech Legal Insight for Start-Up and Established Technology Businesses

Beware of IP Scams-Invention Development

Posted in Development & Commercialization of Technology, IP Counseling and Strategies, Technology News & Events, Technology Transactions

Information about patent and trademark applications, processes and maintenance requirements is much more accessible to the public than it used to be.  In particular, the United States Patent and Trademark Office (USPTO) has very good information available (www.uspto.gov).  Surprisingly, patent attorneys continue to find the same faulty understandings and confusion about the patent and trademark processes.   Not surprisingly, in view of the confusion, there are many scams focused on taking advantage of inventors.   The following advice has been derived from several initiatives the USPTO has directed to advising the public about common scams, in particular about invention development companies.

TOP TEN SCAM WARNING SIGNS

1.       Slick ads on radio, TV and magazines.  [These are the first “hooks”.]

2.       Refusal to respond to your questions in writing signed by a company official. [Legitimate companies will provide the answers in writing.]

3.       Salespersons want money right away …up-front.

4.       You are told to describe your idea in writing, mail it to yourself and don’t open the envelope. [This is worthless advice.]

5.       You are promised a patent search but no patentability opinion by a patent attorney/agent. [This should be provided to you.]

6.       You are guaranteed to get a patent or your money back. [No one can guarantee issuance of a useful patent.]

7.       You are advised to apply for a design patent. [This type of patent has limited applicability to many inventions.]

8.       You can’t reach salespeople of company officials without leaving many messages [Maybe there is no real office location or company.]

9.       You are told that your idea is a “sure-fire” hit! [Probably every client of this company is told that. Be skeptical.]

10.     Refusal to provide client references or copies of forms and agreements for your review. [Get at least five names to contact and show the forms to an attorney before signing.]

          The prevalence of scams and fraudulent invention disclosure firms has been such a problem that the federal government has formally addressed it.  The FTC has investigated, fined, and permanently enjoined some companies and individuals from the business of “invention development.  The USPTO advises inventors to always check the reputation of invention promoters/promotions firms before making any commitments, and to remember that not all invention promoters/promotion firms are legitimate. Inventors thinking about using one of these firms should ask for references from their current clients and check the firm’s reputation by:

  • Looking for complaints listed on the FTC or USPTO web site
  • Consulting the Better Business Bureau
  • Consulting the Chambers of Commerce in your area

While the USPTO does not investigate complaints or participate in any legal proceedings against invention promoters/promotion firms, under the American Inventors Protection Act of 1999, the USPTO does provide a public forum for the publication of complaints concerning invention promoters/promotion firms. Also, in the forum, the USPTO publishes responses to the complaints from the invention promoters/promotion firms.

The USPTO accepts complaints filed against invention promoters/promotion firms and forwards these complaints to the invention promoters/promotion firms for response. Both the complaints and the responses are published in the public forum so that they are publicly available. The USPTO does not accept complaints submitted under this system if the complainant requests confidentiality.

Additional information can be found at the following links