Got an Invention? Don’t Fall for These Patent Scams

Getting an idea for a cool new product patented is a dream for many creative thinkers, but unfortunately there are plenty of scammers out there ready to pounce on that dream. Here’s how to spot them and where you should turn for help instead.

By H. Dennis Beaver, Esq.

published 14 January 2021

in Features

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(Image credit: Getty Images)

“Mr. Beaver, suffering from bad arthritis in my hands and nighttime leg cramps — charley horses — led me to inventing a battery-operated lime squeezer that I would like to market.

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“I was turned on to drinking tonic water, which contains quinine that reduces nighttime leg cramps. I enjoy fresh lime juice in my tonic water, but with very bad arthritis, it is painful to manually squeeze limes, and so I developed this nifty device.

“Several months ago I saw an ad on late-night television from a company wanting to help inventors get their products patented and marketed. I called and wound up sending them several hundred dollars for a free evaluation, preliminary patent research and a marketability study. They have been very encouraging, and now want $5,000 more. My wife says I am being scammed. What do you recommend?” — “Taylor”

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Invention-Promotion Firms Just Want Your Money

While Taylor did not give me the name of the company, what he described fit what Bakersfield patent attorney James Duncan describes as “a highly refined scam that appeals to people who have an idea for an invention they desperately want to see realized.”

And, just as my reader described, “After seeing their ad, you phone, they send you a form to fill out giving a brief description of your invention, and within days they call you back, saying ‘This is great! We can get it patented and marketed for you, and to begin, just send us $700 for a professional evaluation.’"

“This is Round 1 of how you are about to be scammed,” Duncan observes.

“Soon, you get an official-looking, bound volume with marketing data — all canned stuff — the statistics how your area is growing, and they set you up to think that you will capture this fast-growing market.

“They will say, ‘If you want to go the next step, we can do a provisional patent application, show up at trade fairs and make lots of money for you, and all this requires is signing our agreement.’

“The bell is about to ring for Round 2.”

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So, if you are the inventor, what are you thinking at this stage?

“For lots of people, this is the best news they have had in years and eagerly sign the contract without reading it carefully and not paying attention to the venue clause — stating where any disputes are to be handled. This is Round 2, and the price tag frequently goes up to $10,000,” Duncan notes, adding:

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“I have seen people who fell for this, were out over $20,000 and had nothing to show for it. They were assured of making huge sums of money, and told, ‘This modest investment will pay off big time.’ But it is just one empty promise after another, such as, ‘We’ve found firms who will market your product,’ but nothing concrete ever develops.

“Finally, the client, who lives in Montana, realizes they’ve been scammed and asks a lawyer, ‘What can I do about this?’ But the contract specifies venue in Florida!”

Stunning Realities – Scammers Everywhere

Before spending 10 cents with any invention-promotion company, spend 10 minutes and Google “Scam prevention USPTO (United States Patent and Trademark Office).” Additionally, Google “FTC Invention Promotion Scams.” You will find one horror story after another, millions of dollars stolen and enough heartbreak for a Netflix documentary.

You will read about a repeat group of scammers who get prosecuted and, like zombies, return from the grave, changing company names, operating boiler rooms with banks of operators who answer calls to their “800” phone number.

“Hardly anyone who becomes a ‘client’ of these promotion companies makes money. The ones who make the money are the crooks who run these scam operations,” Duncan says, shaking his head in anger.

“Dennis, it is so sad. They prey on the uneducated who watch late-night TV. Many have lost a job and are in a poor position to lose money but send $700, receive this glowing report suggesting they will be wealthy, and are talked into putting 10 grand on a credit card. At the end of the day they have nothing and are in deep financial trouble, strung along by hope.”

Hard Truths from a Patent Attorney

“Before spending any money — even on a patent lawyer — use free resources offered by the Better Business Bureau, Federal Trade Commission (FTC) and the United States Patent and Trademark Office. In addition, Small Business Development Centers across the country put on workshops with other inventors who can provide guidance at no charge.”

Duncan concluded our interview by suggesting, “If a family member is about to dial that ‘800’ number, have them first read the FTC’s ‘Invention Promotion Firms’ report.”

To which I add, “And then hide their phone!”

Dennis Beaver Practices law in Bakersfield and welcomes comments and questions from readers, which may be faxed to 661-323-7993 or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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After attending Loyola University School of Law, H. Dennis Beaver joined California's Kern County District Attorney's Office, where he established a Consumer Fraud section. He is in the general practice of law and writes a syndicated newspaper column, You and the Law. Through his column, he offers readers in need of down-to-earth advice his help free of charge. "I know it sounds corny, but I just love to be able to use my education and experience to help, simply to help. When a reader contacts me, it is a gift."