Invention company scams and how you can successfully avoid them!

Invention Company Scams and How to Avoid Them

During these difficult economic times there are many companies that are willing to step up and take advantage of inventors or would be inventors.    The USPTO reported in 2002 that exploitation of U.S. inventors costs small business people $200 million annually.  (See: 

Don’t get me wrong, there are many companies that provide skillful, ethical and useful services to inventors.  This post is about some of the steps you need to take to avoid being taken advantage of by one of those companies.

The American Inventors Protection Act of 1999, provided that the USPTO will provide a public forum for the publication of complaints concerning invention promoters and promotion firms.   Also the USPTO would publish responses to the complaints about the invention promoters and promotion firms.

The American Inventors Protection Act of 1999 gives inventors certain rights when dealing with invention promoters.  Before an invention promoter can enter into a contract with you, it must disclose the following information about its business practices during the past five years:

• How many inventions it has evaluated?

• How many of those inventions got positive or negative evaluations?

• The company’s total number of customers.

• How many of those customers received a net profit from the promoter’s services?

• How many of those customers have licensed their inventions due to the promoter’s services?

This information can help you determine how selective the promoter has been in deciding which facts for consumer’s inventions it promotes and how successful the promoter has been.

Source: Federal Trade Commission

Invention Promotion Companies Fined by the FTC

Davidson – $10 Million to Settle FTC Charges


Patent & Trademark Institute (PTI) fined $60 million


National Invention Services, Inc. (NISI)


Shocking Performance of One Invention Company in “Helping” Inventors

“Accurate statistics of the success rate of invention promotion firms is difficult to come by.  Nonetheless, as a result of certain legal actions taken against some of these firms, overall success rates have come to light. One such firm, Davison Associates, disclosed that of 900 ideas where a client had a prototype built of their invention at an average cost of $11,000, only 30 of those inventions were licensed within 6 months.  Of the inventions licensed, only 10 made more in license fees than the cost of the invention promotion services.”  Source:

Contact the Federal Trade Commission (FTC) to ask them whether the company you used is under investigation.  If you have already paid money to one of these firms, we recommend that you call the FTC to let them know about your situation.  While you may get a portion of your money back or none at all, by reporting it you will be able to help stop others from being scammed.

Articles/Publications/Ratings I recommend or find helpful:

Federal Trade Commission

“Got an invention? You, too, can be scammed”: Expert: Consumers lose $300 million a year to promotion firms.  See:

“Contact the USPTO before you Get Burned”; US Patent and Trademark Office;

How to Avoid Invention Scam Artists:

The Better Business Bureau (BBB) rating of the company (if the company belongs to the BBB).  See


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Filed under business, Economy, FTC, Intellectual Property, Invention, Invention Company Scams, Invention Promotion, Invention Promotion Companies, Inventions, job, Jobs, USPTO

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