I recently assisted a client who was quite stressed when she first approached me, having been entangled in the complicated processes, promises, and contracts of an invention promotion company. Like most customers of these promo companies, my client was a smart, but busy and inexperienced inventor who lived in a rural area; not exactly the meet-your-angel-investor-at-the-local-Diary-Queen kind of place. I imagine she googled questions like “what do I do with my new invention?” and “how do I get a patent?” before linking up with this particular promo company, probably through an online ad.
After a lengthy list of promises from the company of making her money, minimizing her risk, and LIMITED TIME ONLY deals, my client was persuaded to elect a paid package inclusive of a provisional patent filing, audio/video files, and other supposedly awesome stuff that could probably be obtained for free from a local small business development center. Buried within her service agreement, and responsive to public disclosure laws, were data points concatenated by endless disclaimers effectively stating that the company over its long, profitable history has had less than a 1% success rate of closing net positive deals for its customers. Now, which sounds better: “we sign a license agreement on behalf of an inventor every two weeks!”, which sounds promising and is a common claim; or, “we earn less than 1% of all our customers cold, hard cash, while we rake in millions!”?
Let me hammer this home with some random, comparable probabilities:
1) Probability of getting cancer: 50% men, 33% women.
2) Probability of living to 100 if born this year: 33%
3) Probability of being victim of a serious crime: 2%.
4) Probability of an adult male being afraid of spiders: 1.2%
5) Probability of being audited by the IRS: 1%.
6) Probability of realizing a net profit from the activities of a promo company: 0.95%.
7) Probability of dying in a car accident: 0.88%.
8) Probability of dying from firearm assault: 0.27%.
The rodeo is on, and unless you’re careful, you may be taken for a ride by one of these companies. Their marketing tactics are quite impressive, much better than mine, though it’s hard to fairly compare since I try to avoid claims of riches while burying data that might belie such claims. Unfortunately, they are more or less unregulated by the PTO. In this case, awareness is your best defense to personal exploitation.
Resources
American Inventor’s Protection Act of 1999
FTC: Invention Promotion Firms
About Kevin Christopher
[avatar user=”kevin” size=”medium” align=”left” link=”file” /]Kevin is founder and principal of Rockridge®. Kevin’s practice areas include corporate, patent and trademark law. He is an entrepreneur, NIH RADx faculty member and Small Business Innovation Research (SBIR) reviewer. He mentors impactful and innovative founders through First Flight Venture Center, Oak Ridge National Lab Innovation Crossroads, and Tsai Center for Innovative Thinking at Yale. Kevin has been recognized as a SuperLawyer by Thomson Reuters and Top Business Leader by Conscious Company Magazine. Read more about Kevin, connect with him, and Calendly him.
RVL recommended reading by Kevin:
Plainspeak IP: IP Fundamentalist of Fundamentals
Plainspeak IP: Social Media Influencers
Grading Georgia’s Public Benefit Corporation Law
Improving Your Trademark EQ: How to Choose a RAD Trademark
What is a Patent? Why do I Need One? How can I Get One? What’s it Gonna Cost Me?
Common Mistakes Made by Entrepreneurs
About RVL®
Rockridge Venture Law® was launched in 2017 to become the preeminent intellectual property and technology firm across the Appalachian Innovation Corridor. We now have offices in Chattanooga, Durham, and Nashville, and represent clients and interests globally. Our services include all aspects of intellectual property, litigation, M&A, privacy, technology transactions, and ventures.
In 2018 and 2019, we were recognized as B Corp Best for the World for our commitment to triple bottom line business practices. Rockridge® is also certified by 1% for the Planet for its nonprofit partnerships advancing stewardship and sustainability. RVL’s nonprofit partners in 2020 include Green|Spaces, Living Lands and Waters, Mustard Seed Ranch, and the NC State Lulu Games Social and Environmental Impact Competition. We value transparency and proudly publish our yearly impact reports.
Our pioneering environmental and social impact programs attract top-notch legal talent and assure our clients of missional alignment with their corporate values. Rockridge uniquely addresses two modern profit drivers: innovation (uptake and development), and corporate social responsibility. We’re Building Today’s Company for Tomorrow’s Economy® by leading clients through the dizzying array of information controls, by helping them to develop and monetize proprietary assets, and by enabling their impactful products, programs, and principles.
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