Invention Promotion Firms

WARNING

So you've got a great idea for an invention that's a sure bet to make you money.

Now what?

If you're like most amateur Canadian inventors, getting your product to market through a manufacturer can seem a bit overwhelming. That's why many consider hiring invention promotion firms to do the leg-work for them. These “all-in-one” firms often promise to evaluate, develop, promote, patent and market their inventions for you.

And while most invention promotion firms are legitimate, there are some unscrupulous firms in the marketplace that inventors must watch out for. These firms prey on your enthusiasm and make false or exaggerated claims about your invention's market potential to win your business. Once they have it they often do little or nothing to earn their fees.

But by doing a little homework, you can protect yourself and your invention from these unscrupulous firms. Here are some precautions you should take before signing any contract:

• Ask the firm to disclose its success rate. Many unscrupulous invention promotion firms claim to have a great record licensing their clients' inventions. Be sure to obtain the names and telephone numbers of their recent clients. Success rates show the number of clients who made profits on their inventions. Check the references carefully to confirm. If the firm refuses to provide this information, be wary.
• Ask for the total research cost for the invention through marketing and licensing early in your discussions. Walk away if the salesperson hesitates to answer or provides an unreasonable response. Many unscrupulous invention promotion firms offer inventors two services in a two-step process: one involves a research report or market evaluation of your idea that can cost you hundreds of dollars; the other involves patenting or marketing and licensing services, which can cost you several thousand dollars.
• Ask how the invention promotion firm makes its money. Many unscrupulous companies offer to provide invention assistance or marketing services in exchange for advance fees that can range from $5,000 (U.S.) to $10,000 (U.S.). Reputable licensing agents rarely rely on large up-front fees.
• Ask the firm for its rejection rate - the percentage of all ideas or inventions that it finds unacceptable. Legitimate firms generally have high rejection rates and accept only a few ideas or inventions because the granting of a patent does not guarantee commercial success.
• Ask the invention promotion firm where they are based and if they have any Canadian offices. Inventors should be cautious when dealing with an international invention promotion firm. Some unscrupulous firms are located outside Canadian jurisdiction, thereby avoiding Canadian laws. Inventors should be aware that once money is sent to a questionable firm operating outside of Canada, it may be gone for good.

For more information, inventors can contact the following organizations:

Canadian Intellectual Property Office (CIPO)
819-997-1936

CIPO maintains a number of lists, including:

• Canadian patent agents
• Canadian trademark agents
• Appropriate regulatory authorities in most countries

Canadian Innovation Centre at Waterloo
1-800-265-4559

Intellectual Property Institute of Canada
613-234-0516

Consumers who suspect they have been the victim of an unscrupulous invention promotion firm or who want information on the application of the Competition Act, should contact the Bureau's Information Centre at 1 800 348-5358, or visit our Web site at www.cb-bc.gc.ca.

The Competition Bureau is an independent law enforcement agency that ensures all Canadians enjoy the benefits of a fair and competitive economy, low prices, product choice and quality service. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.

For media enquiries, please contact:
Maureen McGrath
Senior Communications Advisor
Communications Branch
819-953-8982

For general enquiries, please contact:
Information Centre
Competition Bureau
1-800-348-5358