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To check if a company has been investigated and/or fined by the Federal Trade Commission (FTC), enter the word INVENTION in the FTC's web site search engineFTC's web site search engine and you will be able to view a list of FTC news releases about invention scam companies which are public information.

Please note that a separate window will open for you to do the search. When you are finished, you can close the window and return to NCIO.

A Brief Introduction
to Invention Scam Companies

By Stephen Paul Gnass
Scambusters: Table of Contents
  • A Brief Introduction to Invention Scam Companies

  • Spotting Invention Scams: "We-do-it-all-for-you" Warning Signs Chart

  • "DE-SCAM-BLER" Checklist

  • The Big Question: What's Your Success Rate?

  • A Special Warning About Nondisclosure (Confidentiality) Agreements

  • FTC Facts for Consumers: Invention Promotion Firms

  • FTC Cracks Down on Fraudulent Invention Promotion Firms

  • FTC Settlement With Pennsylvania Invention Promotion Firm Requires $80,000 Payment, Disclosures; Cooling Off Period

  • FTC NEWS: New Jersey Invention Promotion Firm Settles FTC Charges. Defendants To Pay Three-Quarters Of A Million Dollars In Redress

  • Most people with a new idea immediately start looking for a company that will buy or license their idea. But the truth is that only a handful of legitimate companies will even agree to review a "raw" idea.

    This is where invention promotion firms and marketing companies come in. Their ads on TV, radio and back of magazines offer to submit ideas to industry and they offer their assistance as a "one-stop-we'll-do-it-all-for-you" source.

    These firms generally follow this process: First they send out a free kit with a pre-signed confidentiality agreement (also known as a non-disclosure form) with general information about their services. Next they offer to do a marketing evaluation report for several hundred dollars. After that they offer a package combining a patent with promotion or submission of the idea to manufacturers, licensees, and industry - this time for a fee averaging $3,000 to 10,000 (or what the market will bear).

    As the well known quote goes, these firms promise to be " a jack of all trades", but are "masters of none". The patents they issue are usually weak or worthless "design" patents, and sometimes they only file a $10.00 Disclosure document which may even jeopardize the idea's future patentability.

    The few direct mailings they send to companies usually go to old mailing lists and if any of the addresses are still correct, the contact person no longer works there and the mailings usually get tossed in the trash.

    It is often only after a year or two of zero activity that the inventor begins to realize that the company may be a scam, but by then it is too late.

    The truth is that commercializing a new idea is a complicated process that takes time, energy, knowledge and persistence. It can take up to an average of six years to launch a new product. Considering that ideas are in different industries, and that the inventors have a wide variance in life and business experience, there's no definite road map for success - nor one company that can do it all.

    The bottom line is that nobody can guarantee you success. But if you learn as much as possible about the process of inventing before you ever start spending money on patents, prototypes, etc., and if you make sure that you do not abdicate your responsibility and accountability, you will not only possibly save thousands of dollars, but will also greatly increase your chances of success.

    The FTC has been conducting a law enforcement sweep called "Project Mousetrap". If you are in contact with one of these "one-stop-we'll-do-it-all-for-you" scam firms, we suggest that you contact the Federal Trade Commission (FTC) to ask them whether the company 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 at best you may be able to get a portion back, by reporting it you will be able to help stop others from being scammed. Additional information can be found on NCIO's web site and the FTC's web site

    For a list of FTC news releases about invention scam companies that have been investigated and/or fined, enter the word "INVENTION" in the FTC's web site search engine.

    Peter Lamberton
    Bureau of Consumer Protection

    Jerry Steiner
    San Francisco Regional Office
    901 Market Street, Suite 570
    San Francisco, CA 94103

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