Wednesday, August 08, 2007

Is InventSAI breaking the law?

The post is wholly one attorney's opinion and in no way states the opinion of the firm, or attempts to establish any facts.

Today I learned that an Invention Promotion Company, InventSAI, may not be fulfilling their required duty, by law, of disclosing the profitability of companies using their services. In fact, there appears to be a question as to whether The InventSAI Network, LLC is violating not only the the letter but also the spirit of the Amercian Inventors Protection Act of 1999 (the "Act").

Under the Act, whose full text can be seen at http://www.uspto.gov/web/offices/com/speeches/s1948gb1.pdf, an invention promoter or an invention promotion firm must disclose specific information regarding their past business practices. These mandatory disclosures are required by law. Specifically, invention promotion companies are required to provide "the total number of customers known by the invention promoter to have received a net financial profit as a direct result of the invention promotion services provided by such invention promoter."

InventSAI states "An exact number of inventors commercializing their inventions can only be estimated because InventSAI clients are not obligated to disclose financial data. Nevertheless, based upon client feedback, of the 815 total InventSAI clients contracting for commercialization services, at least 152 have reported commercial success with hundreds of cases still active." Thier online post can be seen here: http://www.inventsai.com/AIPA.html

The law requires InventSAI to disclose "the total number of customers known... to have received a net financial profit.". It appears InventSAI is playing the ostrich game - what I don't "know", I don't have to disclose. However, I read the law differently. The law requires InventSAI to disclose "known" profitably customers. InventSAI by its own admission does not know of any net profitable customer since its customers "financial data" is not disclosed. Therefore, under my estimation, InventSAI is required, by law, to state it knows of zero profitable companies that have used its services.

Moreoever, stating that "at least 152 [customers] have reported commecial success" is misleading and potentially dishonest. If InventSAI does not know their customer's financial data, how can they know if they're commercially successful? I'd like to know what InventSAI's definition of commercial success is. Moreover, by simply providing "commercial succes" data as opposed to "net financial profit" data, InventSAI seems to simply be providing data they want to provide, instead of the data they are REQUIRED to provide, by law.

WHAT ARE THEY HIDING? I welcome a phone call from InventSAI to explain thier position and why they feel they can get around this law in this manner.

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Monday, August 06, 2007

DAVISON ROCKS!!!

OK, for thos of you who don't know me by now should realize that I'm sarcastic. Hence, the title of this blog article.

Addtionally, it would be remiss of me if I failed to say sorry. I'm sorry that we've been absent from posting any recent blogs - I suppose the summer blog malaise started to seep as the temperature outisde started to push 100 degrees on a daily basis. So, although this new blog article is waaaaayyyyy overdue, in the hopes of kicking off a new blogging season with the type of article we wish we did not have to post, but feel it is our job to so do...

Once again, an invention promotion company has reared its ugly head to show us just how inept they actually are. As our blog articles on InventHelp and Advent Product Development disclosed their inability to create profit for their clients, Davison's own website (http://www.davison54.com/disclosures/disclosure.php) states the same thing. Here's what Davison tells us about themselves:

(1) 41,128 consumers signed licensing agreements and purchased research services from Davison in the last 5 years.
(2) 11,598 consumers purchsed product design services from Davison.
(3) Of these, "THE TOTAL OF CONSUMERS IN THE LAST 5 YEARS WHO MADE MORE MONEY IN ROYALTIES THAN THEY PAID, IN TOTAL, UNDER ANY AND ALL AGREEMENTS TO DAVISON, IS EIGHT(8)."

So, you have about a .0002% chance at making money with Davison if you purchase their research services. That means, that about 2 out of every 10,000 people who purchase these services with Davison make more money on their product than they spend with Davison. And if you spend the big bucks with Davison and purchase product design services your chances at makign money with them go up to a whopping .0007%. Or, about 7 out of every 10,000 people who contract Davison to help design their product make more money off of their product than they spent with Davison. So, if you're thinking of using Davison, my suggestion would be for you to play the lottery instead. They appear to have better odds: http://www.coloradolottery.com/games/scratch/featured.cfm?FeaturedGameID=101 (please note sarcasm statement at beginning of post).

Oh, and one more thing. Davison also states "THE PERCENTAGE OF DAVISON'S INCOME THAT CAME FROM ROYALTIES PAID ON LICENSES OF CONSUMERS' PRODUCTS IS .001%." This means that for every $1 Davison makes from licensing a product submitted to it, Davison is making $1000 off of the people submitting the products.

Numbers don't lie - and these are Davison's own numbers! As we suggst to our clients, do not use these companies - you are more likely to succeed if you are willing to put in the effort yourself and use reputable marketing and manufacturing organizations, while protecting yourself legally along the way. Contact Leyendecker and Lemire (www.coloradoiplaw.com) and we can steer you in the right direction.

Numbers are current as of June 30, 2007.

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Monday, May 14, 2007

Kudos to Advent Product Development!!!

Between Oct 1, 1998 and Dec 6, 2004, they had a perfectly imperfect record! That is, of 2452 people that signed Phase II representation Agreements, NO ONE, ABSOLUTELY NO ONE made more money than they gave to Advent Product Development! The beauty is this is the number the company itself presented in a recent lawsuit as reported by our friend, Stephen Nipper, over at THE INVENT BLOG.

And those of us in Colorado are especially lucky because we have our very own Advent Product Development office here in the state. Let's all give Advent Product Development a call and let them know how we feel about their good work.

So if you have an invention and a lot of money burning a hole in your pants, it seems you can't go wrong with the boys at Advent.

(I have been told sarcasm does not transfer well in writing. So in case you were confused, I am not advocating anyone use Advent Product Development and in fact my opinion is you should avoid them and other similar invention promotion companies like the plague.)

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Saturday, March 17, 2007

Updated InventHelp Success Numbers

This is direct from the InventHelp Website:

"From 2004-2006, we signed Submission Agreements with 6,269 clients. As a result of our services, 108 clients have received license agreements for their products, and 15 clients have received more money than they paid us for these services."

See http://www.inventhelp.com/inventhelp-client-invention-stories.asp.

Not much different from the numbers reported for 2003-2005 in my previous blog post that you can read HERE (second article).

To restate Invent Helps numbers:

Only 1 in every about every 418 clients actually made more money from their inventions than they spent with InventHelp: a whopping 0.24%.

Draw you own conclusions...

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Saturday, February 24, 2007

Inventorshelpline.com in Temporary Receivership

The Patent and Trademark Insitute of America, the company behind InventorsHelpline.com, is in Temproary Receivership as reported at the top of their website and ordered by the Honorable Gerald Bruce Lee in the matter of FTC v. International Product Design, Inc., et al., Case No. 1:97-cv-01114-AVB . It appears the FTC is attempting to bring the long arm of the law down on another Invention Promotion Company.

By the way, the InventorsHelpline.com site is interesting. They even have some infomerical type videos with Doug Lewellyn or People's Court fame interviewing one of the company's CEO. The company's message is inticing and I can see why they have had success in getting inventors to sign up with them. There is only one small problem in my opinion: Companies like this just don't deliver in the end! They offer very little value for the money spent.

Maybe this company will close up shop after the litigation is finished. BUT don't bet on it! Remember the line from the Eagles Song: "the lure of easy money has a very strong appeal".

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Friday, February 23, 2007

Invention Promotion Companies: Response to an Anonymous Comment to my December Post

An anonymous reader wrote the following in response to my blog article about the poor success of Davison and InventHelp, two of the more well known Invention Promotion Companies. I felt his response desired a response from me. Read my article, his comment and my response thereto and draw your own conclusions. And, of course, feel free to leave comments of your own either in support of me or the anonymous reader. Here is his unedited comment:

I am not an employee of Inventhelp or Davision, I am a patent searcher. Your bashing marketing companies because they are not making inventors rich. Do you make your clients rich? How many applications have you completed for clients and those clients ( I am talking about a regular person not a company) turned around and magically got rich? When you perform patent services for a client that is all they get, if there lucky. Maybe the get a patent. A marketing company at least tries to sell there idea's to companies so they can make money. If I had a choice to obtain a patent I would not go to an IP firm and get a patent. What does that give me, a patent. Now what? I am an inventor. I don't have contacts to large corporations to sell my IP. It is NOT marketing companies fault if corporations do not buy/license a clients patent. But you are holding them responsible for it. If you put something on Ebay to sell and it does not sell is it Ebay's fault? No, no one wanted what you had to sell. So your feelings toward marking companies can NOT be because the percentages of clients that make money is low. It can't be because some marketing companies are crooks because there are a lot more crooked patent attorneys out there than marketing companies. So what is your exact beef with marketing companies?

My response to each point:

I am not an employee of Inventhelp or Davision, I am a patent searcher.

OK, I guess I have to take your word on that since you did not reveal who you are. Why not put your name down. Plenty of inventors read this blog and may be looking for a good patent searcher. Heck, my firm does orders a lot of patent searches and we can always use another great patent searcher. If you are great, let us know. Why not plug your business?

My suspicion is that while you may not work for Davison or InventHelp, you may work or derive your work from one of these companies or another invention promotion company. In the interest of full disclosure, I would appreciate it, if you would come clean.

Your bashing marketing companies because they are not making inventors rich.

Actually, that is not true. Not once in my article did I use the word rich. Truth be told as indicated in my article: the success rates I indicated were the percentage of customers of the two companies that actually made more than they spent with the company. The numbers came directly from the companies' own web sites. I was merely reiterated what they themselves had reported.

If you read the rest of my blog articles and review my website including my FAQ section, you will realize I am very forthright and honest about how few inventors actually make money from their invention. I sincerely believe, however, the success rates of companies like Davison and InventHelp are WELL BELOW industry norms, and their own statistics appear to bare this out.


Do you make your clients rich? How many applications have you completed for clients and those clients ( I am talking about a regular person not a company) turned around and magically got rich?

The honest answer is none: it is almost impossible for anyone to "magically" get rich in the inventing game. It takes lots of hard work and perseverance. Again, I talk about this in the aforementioned FAQ section. Now are there clients of mine that commercializing their inventions and have a real chance at being successful? You better believe it! One of the big problems with the invention promotion companies in my opinion are that they sell the dream with almost no dose of reality: they would have you believe that if you use them, you will become or may become magically rich. This just ain't true and their own numbers prove it!

A marketing company at least tries to sell there idea's to companies so they can make money.

I just can't agree with that statement: I honestly don't believe invention promotion companies actually try to make their clients money. OK, that is a bit harse. Perhaps, they do try a little: a very very little.

It is my very strong opinion that inventors can do so much better trying to sell their inventions to companies than any invention promotion firm can. I would venture a guess that the success rate of individuals promoting their own inventions is on the order of 1-5%. I have not done any studies but these are numbers I have seen mentioned. If my belief is true this would mean that an inventors chances of success on their own is about an order of magnitude greater than the chances an invention promotion company will be successful.

By the way, there are a select few upstanding marketing companies out there. They are, however, hard to find. They don't have huge marketing budgets so you will not find them advertising on television or in heavy rotation on the radio. I suspect they believe in spending the money clients give them on actual services instead of expensive marketing to draw in new clients.

It is NOT marketing companies fault if corporations do not buy/license a clients patent. But you are holding them responsible for it.

OK, let us assume it is not the invention promotion company's fault. If we take you premise that corporations aren't buying the inventions promoted by the invention promotion company, why would any well informed inventor ever use one of these companies? And why would any invention promotion company, and more particularly its owners, knowing that they are not, except for a very few select and rare instances, going to be able to sell an inventors idea to a company continue in the business. Where is the pride. If I knew I was just taking people's money with the realization that almost all would never receive any value back from the expenditure, I don't think I could sleep at night.

I respect my clients and try to lay everything on the table: their chances of success; whether a patent makes sense for them in terms their chances at getting quality protection; and the potential costs of the process. I never promise that a client will be able to license an invention to a company. In fact, I let them know how difficult and rare that is. I don't get the feeling the invention promotion companies as a whole are doing this. If you know of exceptions, please point them out. I will investigate and if this turns out to be true, I will be the first to announce it in this blog.

It can't be because some marketing companies are crooks because there are a lot more crooked patent attorneys out there than marketing companies.

I guess I don't understand exactly what you are trying to say in the above sentence but I will take a stab at it anyway. I HAVE NEVER ACCUSED ANY PARTICULAR INVENTION PROMOTION COMPANY OF BEING CROOKED. In fact, I believe that most try to operate within the law if not barely. I do have my suspicions about a few but I have never accused them publicly of breaking the law (as a point of clarification, I have no knowledge or evidence that Davison or InventHelp, the subject companies of the original article, are currently breaking the law).

The fact is, however, many invention promotion companies have in the past found themselves in trouble with the law and several executives and owners have done time. In the past, several invention promotion companies have been sued by the Federal Trade Commission including the Invention Submission Corporation (ISC), which is now goes by the service mark InventHelp. In fact, ISC paid the FTC 1.2 million dollars pursuant to a 1994 settlement. See the FTC RELEASE for more information. Now, it has been a while since the settlement, so perhaps ISC has changed it ways. Their website and marketing materials seem to indicate a change for the better. Nevertheless, I do not feel that their services are a good value for consumers.

EDIT - after writing the foregoing, I came upon this judgement against Davison from early 2006. This is a good read that reinforces my points. And keep in mind these are conclusions of law in fact made in a Federal Court after Davision was sued by the FTC. Anonymous may argue Davison has changed since then BUT do companies like this really change? I personally doubt it. And why spend hard earned money with a company with a checkered past when there are reputable marketing companies out there (albeit harder to find because of their much smaller marketing budgets). Anonymous: I would love to hear your defense of Davison in light of this Federal Court Judgement. And answer me this: in light of this ruling, would you actually recommend someone use Davison?

On the subject of crooked patent attorneys, I am sure their are some, although I personally don't know of any. If you have read my blog, you will see that I provide advice to inventors on how to pick a patent attorney. You would also know that I am not a supporter of firms that could be classified as "patent mills". There definitely are a number out there that do not operate in a manner that I would find acceptable in my firm. On the other hand, there are a large number of hard working and conscientious patent attorneys out there as well.

So what is your exact beef with marketing companies?

I don't have a "beef with marketing companies" in general, just Invention Promotion Companies. And my "beef" is quite simple: I feel they don't provide value for the price they charge.

Whether you ever consider using my firm or not, please think long and hard before spending your hard earned money with an invention promotion company. At least before using one of these companies, do your homework. Read the opinions of others. Check out the company's past particularly to find out if they have ever been south of the law. Check out the inventor resources at the USPTO. Read the InventorEd website. And by all means peruse our blog archives. In the end, some of you may hire an invention promotion company, but at least you will be reasonably informed when you do.

Mr. Anonymous, I hope you get a chance to read my response to your comment and I will look forward to your reply. I welcome an open discourse on this topic.

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