International Law

How Do Invention Submission Scam Work?

Great post from over at inventorspot,

Why Invention Submission Companies Are Still In Business ... | Inventor Spot

"Why Invention Submission Companies Are Still In Business if they are NOT Really in the Business of Putting Your Product on the Marketplace?

Let’s take a look at the steps. So if you are typical, you are watching TV and you see one of their advertisements.

They strike a cord with a “would-be” inventor by asking if you have an idea, would you want to become rich by presenting your idea to industry?

You call the 1-800 number to get the “free” Inventor’s Kit. You give them your info.

They call you to ask for money for an “Invention Evaluation or Review.” Typically this is $500. If you don’t call them back, they keep calling.

Once you paid for the Review, then they "discover" that your idea is "original" and could be a big seller.” Many times, this is not true – but they say it just so that you will go the next step with them.

You get excited by the news and pay the next "installment" of upwards of $4,000 for the next phase, creating a “Report.”

“The Report” comes as a nicely bound book that says your invention is patentable and marketable.

Then to continue the process of getting a patent and marketing the invention, there is a request for a lot more money.

This process goes on until they end up with a lot of your money. You end up holding a worthless (most times) design patent.

A seasoned, respected patent attorney will charge about 1/2 that or less to file most patents.

The Federal Trade Commission has compiled a list of warning signs to watch for when talking to invention promotion firms.

Federal Trade Commission attorney Peter Lambert says, “Inventors often fall for flattery. Inventors have spent a lot of time and energy thinking about something and they are looking for validation.

What inventor’s need is honest feedback — not ego stroking.

But because invention promotion companies know an inventor’s weakness, they prey on that.”

There are a couple of reasons that this tricky script will work.

First, cognitive dissonance will kick in to ensure that individuals will to make sure that they believe that their idea really is original -despite the evidence against it.

Second, and this may be a variation of the first, the fallacy of sunk costs will force people to make the next bet -higher than the last- to try to recover the last losing bet.

Third, it is relatively difficult to tell whether a patent attorney is any good. In absence of this, a person will use the enthusiasm of the shill as a proxy for the enthusiasm of the market. Not a good idea.

By the way, this is the same type of trick that franchisor consultants use to trick business owners to franchise their business - check out this thread at Blue Mau Mau.

Full post as published by Misleading Advertising Law on February 14, 2008 (boomark / email).