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Invention Promotion Companies ( IPC ): Client Statements, Provider Questions, and Provider Cautions

Invention Promotion Companies ( IPC ): Client Statements, Provider Questions, and Provider Cautions. James Hendrick Inventor and Technology Advisor Mississippi Small Business Development Center (MSBDC ) (662) 915 – 5001 inventor@olemiss.edu www.mssbdc.org.

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Invention Promotion Companies ( IPC ): Client Statements, Provider Questions, and Provider Cautions

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  1. Invention Promotion Companies (IPC):Client Statements, Provider Questions, and Provider Cautions James Hendrick Inventor and Technology Advisor Mississippi Small Business Development Center (MSBDC) (662) 915 – 5001 inventor@olemiss.edu www.mssbdc.org Required Disclaimer: MSBDC has assisted Mississippi businesses since 1981.Reasonable accommodations for persons with disabilities will be made, if requested at least two weeks in advance. Contact (James Hendrick, 122 Jeanette Phillips Drive, University, MS 38677, 662-915-5001, and inventor@olemiss.edu.

  2. Client StatementsPage 1of2 • “This company is getting my invention marketed.” • Ask: “What exactly does that mean?” and press the issue. • “I am getting/have a book that tells all that.” • Pretty book, NAICS generic, client’s name in bold letters. • Ask: “What kind of research? What will you do with it afterwards?” • Historic IPC price points: • ~$600 • ~$4,000 • ~$12,000 but they are ok with ~$10,500 • “This company from overseas said they will buy my product.” • Probable shill companies.

  3. Client Statements Page 2of2 • “They had me sign their NDA.” • These can be confusing. Ask to read them. • Why would a client sign an IPC’s NDA? • “Yeah, they had me drive over to XXX(Alabama)XXX to sign their contract.” • Adds distance to work • Takes advantage of states with laws more lenient to these businesses. • “I talked to this company and they said my idea is great and I need to get it marketed quick because there is nothing else out there like it.” • Common. Very few experts will ever say this because they know the probability of success. The important thing here is the word “they.”

  4. Service Provider QuestionsPage1of2 • Tell me about what actions you have taken to work on your invention? • This is my lead question. • Actions speak louder than words. • This gets to the point very quick. • What other quotes have you gotten for the same services? • Similar services can be provide by locals for similar cost. • What is their success rate? • Required release

  5. Service Provider Questions Page 2of2 • Tell me what exactly are they going to do for your $10,000.00? • “They are going to get it marketed.” Press further when you hear this. • Where is the company located? • “Pennsylvania or Florida or Alabama” Any of these raise a flag. • What other services do they offer? • “They do it all.” Reputable services tend to do one piece of the effort. • Where is the patent attorney and what is their name? • Obtain name and do USPTO search to examine previous work. (LREP) • How are the drawings/CAD drawings? • “They are not exactly what I had in mind.” • Inventors frequently report that the drawings created are not exactly what they had in mind.

  6. Cautions for Service Providers • The decision to proceed must be that of the inventor. • Your job isnotto discourage or tell them not to use an IPC • Don’t open yourself to: • Suggesting use or non-use of a company • Mistakenly identifying fraudulent IPC’s • Conflict of interest • Be aware of SLAPP lawsuits. • http://en.wikipedia.org/wiki/Strategic_lawsuit_against_public_participation • Your job is to: • Encourage them to know exactly what they are paying for • Encourage them to understand alternatives

  7. Questions?

  8. Extras IPC Job Description Additional Resources

  9. IPC Open Job Position Screen Shot 10-18-2011 – Redacted xxxxxxxxx xxxxxxx xxxxxxx “Largest Invention Firm” xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx xxxxxxx Est. 1984 200 People at HQ xxxxxxx 60+ Cities xxxxxxx xxxxxxx $150,000/yr xxxxxxx

  10. Additional Resources • FTC • Ron Rile/Penny Ballou • Testimonials from 2 of my clients that might be willing to speak • Ripoff Report.com • INVENTION PROMOTERS • “Success” data can be obtained directly from companies as required by federal law: • The Federal Government and many States have regulations that require "Invention Marketing" and "Invention Development" firms to disclose their "Success Rate" in their contracts, and several State and Federal agencies where inventors can file a complaint against an unscrupulous "invention promoter" company. These "success rates" are generally not available to other inventors until they are presented with a contract, and filing a complaint is only useful AFTER an inventor has been taken advantage of. • http://www.inventors.org/patlaw/file-a-complaint.html • Federal Trade Commission: • http://www.google.com/search?gcx=w&sourceid=chrome&ie=UTF-8&q=federal+trade+comission#q=invention+promotion+site:ftc.gov&sa=X&ei=uniXTvy5Osq4tweUusHoBg&ved=0CGAQ2wE&hl=en&bav=on.2,or.r_gc.r_pw.,cf.osb&fp=43b88dc4ecfc77e7&biw=1920&bih=967 • $26 Million in Redress • http://www.ftc.gov/opa/2006/04/davison.shtm • Scam Operation Took More Than $60 Million from 17,000 Consumers • http://www.ftc.gov/opa/2007/03/ipd.shtm • $745,000 in consumer redress • http://www.ftc.gov/opa/1998/07/nisi.shtm • "PROJECT MOUSETRAP" SNARES INVENTION PROMOTION INDUSTRY • http://www.ftc.gov/opa/1997/07/mouse.shtm • Settle FTC Charges and Pay $250,000 in Consumer Redress • http://www.ftc.gov/opa/1998/11/aia.shtm • RON RILEY • Ron Riley • or • Penny Ballou • PBallou@aol.com • 702-435-7741 • The bad: • http://www.techdirt.com/articles/20080906/1437402185.shtml • The ok: • http://web.mit.edu/invent/iow/riley.html • A bit inflammatory, but they probably have as much experience as anyone in this. • I have a recent client on the coast who might be willing to talk and take questions.  I have another client from several years ago that would be good at explaining this as well.  Both are college grads who have paid these companies. • Ripoff report: 155 reports with the word invention: • http://www.ripoffreport.com/Search/invention.aspx • Ripoff report: 133 reports with the word invent: • http://www.ripoffreport.com/Search/invent.aspx • as an example: • http://www.ripoffreport.com/consumer-services/invent-help/invent-help-rip-off-with-thei-cdefe.htm • Note the change in writing style in the followups. • Wikipedia • http://en.wikipedia.org/wiki/Invention_promotion_firm • 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.

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