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The Inventor Protection Act

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The Inventor Protection Act

Post  Admin on Fri 29 Apr 2011 - 8:05

Have you ever thought about what the Inventors Protection Act means to you as an inventor when it comes to dealing with an invention submission company?

Well that’s where the Inventors Protection act of 1999 comes in….. This law provides a policing mechanism for regulating the sometimes-unscrupulous invention promotion services in the industry.

An "invention promoter" is defined to include any entity that performs invention promotion services and holds itself out through advertising in any mass media as providing such services. The term does not include government agencies, nonprofit organizations, entities evaluating issued utility patents or previously filed non-provisional patent applications, entities participating in the sale of stock or business assets, or parties that directly engage in the retail sales of products.The act tries to fill the void in regulations governing such businesses, regulations that were virtually nonexistent.

Now all invention promoters must enter into a written contract with an inventor. In addition, before contracting, an invention promoter must provide to the inventor written information about the company, including the total number of evaluations the promoter has provided in the past five years, broken down by positive and negative evaluations.

The writing must provide information on the number of inventors who contracted with the invention promoter or his company, the number who received profits from their inventions in excess of the fees paid, and the number who entered into license agreements as a result of the services. The new law also requires that the writing list the names of each invention promotion organization the officers and directors have been affiliated with in the last ten years.

So what does that look like?

Here is an example of the numbers from one of the most popular invention companies currently in business trying to “Help” inventors

AFFIRMATIVE DISCLOSURE STATEMENTYou should read all of this information carefully before proceeding.

The total number of consumers who submitted new product ideas to Davison during the past five years is five hundred eleven thousand nine hundred seventeen (511,917). Davison does not provide evaluation of commercial potential; thus, it has provided no positive or negative evaluation of this or any other product idea in the last five years. The total number of consumers who were offered a Pre-Development agreement (or similar contract for research services) is three hundred four thousand one hundred two (304,102). The total number of consumers who were offered a Contingency Agreement (or other contract for licensing representation) is three hundred four thousand one hundred two (304,102). The total number of consumers who purchased a Pre-Development Agreement or similar contract for research services is forty nine thousand thirty four (49,034). The total number of consumers who signed a Contingency Agreement or other licensing representation agreement is forty nine thousand thirty four (49,034). The total number of consumers who were offered a New Product Sample Agreement (or any other contract for design services for a virtual or a product sample) is thirty six thousand seven hundred fifty five (36,755) The number of consumers who signed a New Product Sample Agreement or similar agreement is thirteen thousand two hundred ninety seven (13,297). The number of consumers who obtained a written license with a company that is not affiliated with Davison is three hundred fifteen (315). The total number of consumers in the last five years who made more money in royalties than they paid, in total, under any and all agreements with Davison, is ten (10). The percentage of Davison's income that came from royalties paid on licenses of consumers' products is .001%

Information current as of April 10, 2009

This is one of the largest invention companies out there....makes you think about what the dozens of smaller companies are doing.....

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Re: The Inventor Protection Act

Post  Beth Roberts on Fri 20 May 2011 - 11:28

How can I tell if a company falls under this act? I recently delt with a company who told me they didn't but they look just like one who would

Beth
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The Inventor Protection Act

Post  Roger Brown on Fri 20 May 2011 - 16:38

Before spending money with any company I suggest that you do your research to find out if you need their services or if what they provide you could do yourself with less money invested. Ask the company to provide you with a listing of their successes. Ask "How many Inventors have made more money in royalties than paid them for their services?" If they try and dodge the question or not answer that is a red flag in my opinion. You need to be familiar with your rights under the Inventor's Protection Act of 1999 http://www.uspto.gov/web/offices/com/speeches/s1948gb1.pdf Knowing your rights will give you a better feel if they company you contact is being upfront with you or avoiding answering your questions. Remember, it is your money your investing, get the most for your investment. Whether a company is accredited or not it is always a good thing to look companies up online and do searches with the terms complaints, rip-off, lawsuits, judgments against, inventor complaints, along with the company’s name to see what shows up.

It is my opinion if a company does not adhere to the Inventors Protection act and give you the information requested, in writing, you should not use them.
Here is a portion of the law.

In any event, the AIPA requires invention promoters (i.e., those who provide “invention promotion services”) to disclose a number of things in writing, prior to entering into a contract for invention promotion services. These are:
(1) the total number of inventions evaluated by the invention promoter for commercial potential in the past 5 years, as well as the number of those inventions that received positive evaluations, and the number of those inventions that received negative evaluations;
(2) the total number of customers who have contracted with the invention promoter in the past 5 years, not including customers who have purchased trade show services, research, advertising, or other non-marketing services from the invention promoter, or who have defaulted in their payment to the invention promoter;
(3) the total number of customers known by the invention promoter to have received a net financial profit as a direct result of the invention promotion services provided by such invention promoter;
(4) the total number of customers known by the invention promoter to have received license agreements for their inventions as a direct result of the invention promotion services provided by such invention promoter; and
(5) the names and addresses of all previous invention promotion companies with which the invention promoter or its officers have collectively or individually been affiliated in the previous 10 years.

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The Inventor Protection Act

Post  VJ888 on Fri 11 May 2012 - 15:16

Hello, my name is Ve Ja. I am new in the invention game. What if you are already working with a company and they did not give you the information listed on the Inventor's Act? I looked them up through the Better Business Bureau and they looked good but, they did not give me all the information listed. I am excited because, I am in the beginning process but, I am also neverous about not knowing what to expect next. I asked the company if I should be writing up a business plan or doing anything while waiting for my patent, they said, no everything is being taken care of. Should I be doing something? I know that companies usually look out for their own interest but, I am using my money and I am looking for a big return on my money. I am so happy that I can get educated here with you.

Thank You,
Ve Ja Manigault
South Carolina

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Protection Act

Post  Roger Brown on Wed 13 Jun 2012 - 13:37

I would still approach them and ask for the information you want. If they don't want to give the required information ask them why. You can mention that per the law they are required to provide that information since you have signed with them. Don't pay more money until you know what you are getting into and understand what your rights are under the law.
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