So, you have a good idea and want to make some money from it. Beware! You are in danger of being taken in by scammers! Unfortunately, there are many “Invention Marketing Companies” out there whose sole purpose is to defraud inventors (or would-be inventors) of their hard-earned money. They’ll make all sorts of promises and provide absolutely nothing in return.<\/p>
These nefarious companies can defraud inventors out of thousands or even tens of thousands of dollars, promising to market your idea or your invention to big-name retailers and manufacturers. They might even tell you they will file a patent for you or run a patent search. Maybe they will file a provisional application with the USPTO and nothing else. A provisional application by itself is of no value and is a simple and inexpensive thing to file, but they will charge you thousands of dollars and load you up with empty promises.<\/p>
Of course, some legitimate companies do honest business, helping inventors bring their products to market \u2014 Cad Crowd is one of them! So, how do you tell the good ones from the bad? Well, a few clear signs will indicate whether you’re dealing with a legitimate invention licensing firm or a fraudulent company.<\/p>
The first thing to be aware of is that you cannot monetize ideas. No reputable or legitimate business or firm will pay you just for ideas. You\u00a0can make money from inventions, but inventions are more than just ideas.<\/p>
People will often approach a company or an invention licensing firm with some great idea they’ve had. They don’t want to pay for patenting or developing the concept; they want to sell it to a company and let them handle it. In effect, they want a finders fee for coming up with the idea.<\/p>
Unfortunately, there is no way to sell an idea. Ideas have no monetary value. What’s valuable is an invention. At the very least, you need to have a pending utility patent\u00a0if you want a company to take your idea seriously because this indicates that the concept has been developed with enough specificity and rigor to be of potential value to them. And more importantly, having a patent will show a company that the idea is something they could pursue without getting sued by someone else.<\/p>
Getting a patent is costly. And part of the patenting process involves a ‘reduction to practice<\/em>,’\u00a0which is patentese for you have built the thing.’ This is why inventions are sellable, and ideas are not: inventions require investment and work to\u00a0be\u00a0<\/em>inventions. Ideas are always free.<\/p> Any company offering to take your idea and sell it is lying to you because no company will buy it. Ideas are free. Inventions are valuable because they aren’t.<\/p> Unfortunately, not all inventions are destined to become successful products. Even some innovations that are genuinely fantastic ideas won’t be commercially viable products<\/a> for one reason or another. Part of being an inventor is sometimes having to hear the brutal and honest truth about your invention’s potential for success.<\/p> Fraudulent invention marketing firms will never <\/em>tell anyone the brutal and honest truth. These companies have no incentive to tell an inventor when their idea isn’t viable because they make all their money upfront. This is how they operate:<\/p> What went wrong? How do you avoid that scam? The first thing to know is that there are nearly 8 million<\/em> patents on file at the USPTO. If anyone ever does a patent search and tells you that they turned up nothing,<\/em> then they are lying to you. A professional patent search by qualified patent attorneys<\/a> will always <\/strong>turn up prior art. So there’s your first warning sign: beware of promises that seem too good to be true.<\/p> The next thing to beware of is any firm that offers you the “great deal” of providing their marketing services for an upfront cost rather than by commission. Legitimate licensing firms like Cad Crowd will almost always work on a commission basis, which means they get paid only when you get paid. Not paying a percentage may seem like a great deal at first. Still, you have to remember that by getting paid upfront, there is no incentive for the marketing firm to deliver on any of their promises. They’ve already got your money.<\/p> Legitimate licensing companies will always be upfront and realistic with inventors because we only make money from inventions that are viable. Our success is tied in with your success. If anyone ever offers to cut their royalty rates in exchange for thousands of dollars upfront, beware!<\/p> The best you can hope for from a fraudulent invention promotion company is that they will send unsolicited mail to manufacturers or retailers with a brochure for your invention (and probably the inventions of a dozen other hopeful inventors). You can bet your bottom dollar that this mail will be discarded without even being opened.<\/p> To make matters worse, this scam could prevent you from filing the utility patent you will need to protect your invention. Those junk mail brochures they might send off for you? Even if no one reads them, that’s considered publication. That will make it impossible for you to file for foreign patents. If they end up filing a design patent or a provisional application, it could jeopardize\u00a0the utility patent application you will need to make if you want to protect your intellectual property.<\/p> As advised by the USPTO, the easiest way to avoid the scam is to use the Federal Trade Commission’s website<\/a>\u00a0to search for the company you are considering. The USPTO also keeps a list of published complaints.<\/a>\u00a0If there have been any complaints against them, stay away!<\/p> Work only with trusted patent attorneys when performing a professional patent search or filing. Always ensure that anyone filing a patent for your invention is filing a utility patent, not a design patent or a provisional patent application. You can look at our Patent FAQ<\/a> for more information on the differences between types of patents.<\/p> Be wary of companies that offer to “evaluate” your invention idea for a fee. While some legitimate firms specialize in evaluating the commercial viability of inventions, this is often a hook used to reel over-eager inventors into the trap.<\/p> Unscrupulous invention promotion firms will often offer to evaluate your invention for you in exchange for a fee of several hundred dollars. They will then either perform a worthless search or not search at all. They will always come back telling you that your invention will be the next big thing and that you’ll make tons of money if only you pay them as much as $13,000 for services.<\/p> These fraudulent invention marketing companies offer two services that would be quite useful for many people \u2014 if that’s what they were getting for their money. Lots of inventors need help with patents. And, keeping in mind that you can’t sell an\u00a0idea, licensing is an entirely legitimate and realistic way for inventors to make money from their inventions without putting forward the considerable investment of capital and time required to manufacture and sell a product themselves.<\/p> Invention licensing (which we offer at Cad Crowd) is a service in which a company will work on behalf of the inventor to promote their invention to distributors. The goal is to find a firm willing to license the rights to produce and sell the product. In exchange, the inventor will receive a royalty of all profits. That sounds like what the invention marketing firms above are offering, right? The difference is invention licensing companies work on commission \u2014 they take a cut of your cut rather than charging you thousands of dollars upfront and leaving you with nothing but false hope.<\/p> To license your invention, you’ll still need a patent, or at least a utility patent pending with the USPTO. You can expect to invest in your invention to get it to the stage where it will be appealing for firms to want to license it. If you’re considering about licensing, you can read our piece on choosing between licensing and manufacturing.<\/a><\/p> Not All Inventions Are Created Equal<\/h3>
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How to Avoid The Scam<\/h3>
So What Should You Do?<\/h3>