A Free Online Newsletter www.businessofinventing.com/b-12
Stephen Paul Gnass, Editor Issue 001

Stephen Paul Gnass

Dear Subscribers,

For most inventors, there is a widespread fear of being scammed, which is understandable since the scams have robbed inventors not only of hundreds of millions of dollars of inventors' hard earned money, but more importantly, the inventors' spirit to invent.

As the Executive Director, NCIO routinely receives many inquiries from people, asking us whether a specific company they are considering working with, or are already working with, is legitimate. NCIO also gets requests from people asking for a list of legitimate companies.

It would seem to make sense that there should be a "list" of legitimate companies. But in our opinion, there is no list, because there are no legitimate companies that take an idea from the concept stage to the supermarket shelves. That's the bottom line. It's a myth. Only the scam factories offer such a comprehensive range of services for fees.

Because there is so much confusion and misconceptions surrounding scams, unfortunately, the good guys with helpful and legitimate "a-la-carte" services [even licensing agents] are often looked at suspiciously by inventors and drilled as if they're scams. So ironically, the good guys often have a difficult time surviving trying to help inventors, while the scams just keep thriving due to the inventor's lack of knowledge.

In this "B-12 for the Brain" issue, I hope to help clarify at least some misconceptions in this area so that inventors can immediately spot the scams and move forward without fear through the inventing path, with confidence and knowledge.

Best Regards,
Stephen Paul Gnass, Executive Director of
The National Congress of Inventor Organizations (NCIO)

  • Founder of the INVENTION CONVENTION®
    E-mail: inventorsmentor@businessofinventing.com

    Do You Have a List of Legitimate Companies?

    By Stephen Paul Gnass


    Spotting the Wolf in Sheep's Clothing

    I usually explain that I can't comment on any specific company [because several scams have already sued some good inventor organizations that listed them], but I think that I can help you figure out if a company is a scam.

    What I try to do is to teach people how to spot the wolf in sheep's clothing. No matter how tempting it is, if a company you are in contact with operates in the specific way described below, offering to do everything, I would suggest that you run the other way.

    Does the company that you are in contact with perform all or most of the following things?

    A Short Questionnaire to Spot Scams

      Making Initial Contact:
    1. Do they advertise to the general public on mass media like TV, radio, magazine classifieds? __Yes __No
    2. Do they send out a "Free inventors kit" in the mail? __yes __No
    3. Does this inventor kit include a pre-signed "confidentiality" (non-disclosure) form that "you" have to fill out and return to them? __Yes __No

      Services They Provide:
    4. Do they evaluate ideas (or imply they do)? __Yes __No
      [they start with an initial free review assessment or charge a fee of $200-700 for an evaluation report - this is the beginning hook.]
    5. Do they perform patent searches? __Yes __No
    6. Do they file patents? __Yes __No
    7. Do they promote inventions? __Yes __No
      [part of this is claiming that they show your invention in numerous tradeshows around the world, including their own]
    8. Do they submit and introduce inventions to companies or industry? __Yes __No
    9. Do they act as a licensing agent to negotiate deals for royalties? __Yes __No
    10. Do they market inventions? __Yes __No
    11. Does the company charge fees in the thousands of dollars [usually anywhere from $4,000-20,000] for all of these functions? __Yes __No

    [Please note that any "one" of these services aren't bad in and of themselves and are fine when offered by "one" company. It's when "one" company offers to perform "all" these services, that you should head out the door and hit the road like the road runner!]

    The We-Do-It-All-For-You Companies

    If you answered "YES" to all or most of these questions, we have found that there's a 99% chance that it's a scam. Basically the company is offering to do "EVERYTHING" for you as a one-stop-shop where you don't have to do anything yourself, and these are high alert warning signs that it's a scam. [We recommend that you get the full report with detailed information about this checklist titled "We-Do-It-All-For-You Warning Signs" at NCIO's Scambusters web section.

    No company that we know of, that claims to do all these things, has ever brought success to inventors (and success by FTC standards only means generating more money for the inventor than the inventor paid to the firm - in other words, theoretically, if you pay $10,000 and you make at least $10,001 back).

    Are There Legitimate We-Do-It-All-For-You Companies?

    Well, it's true that there are a very, very, very few [you can probably count them on one hand] legitimate companies, like Arthur D. Little, which do take products in the idea stage and develop them from idea to market without charging any fees. But because they are going to invest substantial monies into the patent as well as research and development, they are SOOOOOOOOO picky that only a rare product even gets picked. So, with Arthur D. Little, there's a 99.999999% chance that your new idea concept will be "rejected" and you shouldn't pin all your hopes on getting in with one of these few companies. This is in direct contrast with the scam firms, where there's a 99.999999% certainty that your idea will be "approved and accepted", and they claim to "do it all for you" as long as you pay them thousands in fees.


    In my experience of over 30 years in business and 16 years working with inventors, there is no such thing as an "invention promotion firm" or "invention marketing firm" that takes an idea completely from idea concept to the market.

    Inventing is basically an "a-la-carte" process, meaning that you will be picking and using independent specialized vendors for the different jobs you will need performed as you go along. This may come as a shock to many budding inventors - but we believe that there is no magic company that can competently and completely handle the whole process from A through Z. Until proven otherwise, we have not seen success from any invention development "factories". In reality, there is no single magic contact that will "do it all for you" when you're in the idea stage. Oh yes, you will find many companies that **claim** that they will do it all for you for fees - and these are precisely the companies that are the scams.

    The Magic Person

    The main key to understand is that actually it is "you", the inventor, who are the magic person that will drive your idea's progress [or not]. You are the pivotal person in the driver's seat, and need to steer your idea to success. That's why it's so important for you to learn the ropes and get educated about the process of inventing.

    As the decision maker, you will eventually need to contract with different services/companies depending on where you're at with your idea. For example, you will hire a prototype maker only "if" you need a prototype, and "when" you need one, and with an expert in your invention's category. You will hire a patent attorney "when" you need one, and with a patent attorney of your choice who has the proper specialization for your product. And when you're ready to offer your invention for sale or license or are seeking an agent or product scout, you will sign up for a trade show, or advertise your product on an online listing service that is targeted to these types of people, such as the Invention Connection® Cybershow, in order to make "contact" with licensees, agents, distributors, investors, etc.

    Shopping is Your Responsibility

    Yes, you'll have to shop for services and compare prices and quality of services. Yes, you'll have to interview companies to determine which ones will meet your needs the best, and yes, this will take a lot of time, energy and dedication. And if you're new at it, you'll also have to learn all about these services first and how they work, before you even go shopping.

    This is all part of the inventing process. So before you begin, it's important to ask yourself whether you're willing to do whatever it takes to give your invention the attention from you that it will need.


    You have probably heard of:
    1) licensing agents that represent inventors products and who then find a company that licenses the invention and pays royalties to the inventor or
    2) product scouts who are seeking new products for their client companies. 3) companies that directly license products

    It's true that there are licensing agents and product scouts that help inventors get licensing deals and DO NOT charge any upfront fees and only take a percentage of any deal that is successfully negotiated.

    KEY POINT: But before getting to the stage where an idea can be represented by one of these people to be licensed or sold, there are many preliminary things that the inventor needs to do "first" before these licensing agents or product scouts will even seriously consider the invention.

    They generally do not get involved with idea concepts that are unresearched, unprotected, untested, and which are still basically figments of the individual's imagination, like "Flash, I've got a great idea and I just know it must be worth millions". This is the wrong time to seek out a licensing agent or licensing deal. These idea concepts are initially worth "squat", they have zero value. That's where the phrase "ideas are a dime a dozen" came from. Anybody can have an idea, but it's only when someone takes action on the many steps needed to initially protect and research the idea that it becomes valuable.

    A legitimate licensing agent or product scout who will be investing his time, energy and money into an invention, doesn't want to deal with someone who just has a concept where the potential is based on only a gut feeling and wishful thinking.

    So initially, the inventor needs to do the research and development work, like making sure that the idea is properly protected, making sure that the product has a market, making sure the product works, etc., testing and perfecting the design and function of the invention, and gathering all the needed statistics and proof to present to potential licensees or investors.

    The Secret to Spotting Scams

    You need to understand this key point, which is that the accountability and responsibility for your success lies in your own hands. If you realize that you are the key person who has to do the legwork to initially protect, dig out and research information about your idea's market, and test the product, BEFORE you try to find someone to license it or take it to market - you will have grasped the secret to your own success as well as spotting scams.

    Then you will clearly be able to spot any scam companies that offer to take your undeveloped idea concept, and want to charge you thousands of dollars to perform all the work, including evaluation, patent search, getting a patent, marketing it, licensing it, etc. where all you need to do is just sit back and wait for millions to roll into your mailbox. But in reality, you'll end up sitting back and just waiting... waiting... waiting... waiting...

    - end -

    If you're still confused, go to NCIO's web site and read the "Scambusters" section or e-mail us at b-12@businessofinventing.com with any questions.


    Destiny is not a matter of chance;
    it is a matter of choice.
    It is not something to be waited for;
    but, rather, something to be achieved."



    Complimentary Brainstorm: If you're further along the path of inventing with a patent or patent pending, and are ready to launch your product, and need assistance in determining whether to license your idea or build a company around your invention, I'll be glad to offer a confidential brainstorming, no obligation, just e-mail back and please be sure to include your phone number with area code and time zone.


    NCIO is a non-membership, non-profit, free-for-all web site. If you're a newbie to inventing, a lot of free how-to information and resources are available at NCIO's web site, including NCIO's free Inventing 101 on-line course. You can do a preliminary patent search, find a Patent & Trademark Depository Library near you, check if a company has been fined by the FTC, read about scams, and read and print out the free "Inventing 101" on-line course.
    Go to www.inventionconvention.com and click "Inventors Help" button.

    Do you have a question? Please write us and send us information by mail, e-mail or fax to:
    Attn: Editor, B-12 at businessofinventing.com
    Snail mail: 8306 Wilshire Blvd., Ste 391 Beverly Hills, CA 90211
    E-mail: B-12 Editor

    Please feel free to forward this issue to any friends or associates whom you feel will find it beneficial. [Note: But please don't subscribe your friends, since they may think it's spam. Our subscribers list is voluntary.]

    If you're reading a forwarded copy of Invention Convention® Updates, we invite you to subscribe to this FREE periodical e-mail and other inventing info at the linked page below.

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