Have you received a promise that a company will will “develop” your prototype and “market” your invention to a third party licensee?
A quick Google search of “invention scams” reveals a bevy of complaints to the Better Business Bureau (BBB), United States Patent and Trademark Office, Federal Trade Commission (FTC), Operation Mouse Trap investigations, various websites, and miscellaneous blogs on this very subject.
The complaints have common themes:
Huge upfront charges for services. The BBB warns against paying significant amounts of money (ranging from $3,000 to $20,000 or more) to any invention “development” company. A reputable company that believes in your idea will not typically require such fees.
A woefully inadequate prototype. The inventor receives a prototype, but it looks unprofessional and certainly not worth 5K-20K to design, or never receives a working prototype; the complaints are: “I never received a prototype,” or “They never made a prototype.”
Oversimplification of the Idea. The invention “development” company radically alters the idea concept to simply it, to make the company’s job easier to create a prototype.
Sham “presentations.” The invention company promises to pitch or present the inventor’s idea to a third party for potential licensing agreement for mass production and distribution (and royalties to the inventor for his patent, etc), but then the inventor gets scant details about the “pitch” and questions whether it ever happened .
A request for money for additional “pitches.” After the first “pitch” or promotion to one company, the invention company seeks additional money to pitch the idea to another company.
A general failure to deliver services, according to the BBB.
INVENTION DEVELOPMENT “SCAMS”
The above list of complaints and scenarios found online is not exhaustive. But the question remains: are some invention development and marketing companies a “scam” or total ripoff? The BBB warns as follows: “Beware if companies:
Insist on substantial upfront fees.
Won’t disclose other clients’ success and rejection rates.
Guarantee profits and refuse to provide written documentation of promises.
Realistically, few patented inventions are successful and most reputable firms:
Are highly selective.
Rely on royalties from successful clients’ inventions.
Will not promote ideas if there are patent infringement risks.”
CASE REVIEW – HOW MUCH MONEY CAN YOU RECOVER?
There are at least two sides to every story. It may be the case that a company labeled a “scam” (by alleged former customers posting information online) has won awards and helped inventors mass market their inventions. Accusations are easy to levy; proof of a total “scam” or “fraud” can be elusive.
Breach of Contract. We look at whether the inventor signed a contract that gave the invention development company great latitude in terms of the services rendered, allowing said company to do just about anything (or virtually nothing) in terms of developing or marketing an idea. In most cases, the best time to challenge a contract is before one signs it, not after.
In each case, our Pittsburgh lawyers consider the dealings and communications between the inventor and invention company. We look at the promises made and what type of performance was reasonably expected and actually performed. These are often the controlling questions.
American Inventors Protection Act of 1999. We also look at whether the invention development company violated the American Inventors Protection Act of 1999, allowing an inventor to recover his or her money paid to the invention development company, plus attorney fees and treble damages. To have any chance of winning such a recovery, you should expect to produce “smoking gun” evidence of brazen, deceitful / intentionally misleading conduct; otherwise you may not be in the ballpark of getting an award for triple damages. The facts of each case are very important. In appropriate cases, our Allegheny County lawyers in Pittsburgh, Pennsylvania fight for a significant recovery.
Fraud and Misleading Behavior. Remember that an intentional breach of contract is not necessarily “fraud.” Contract law may govern your case, where you signed a written contract. Relative to contract law, your remedies are typically the return of money you paid. For breach of contract, you may not recover attorney fees or triple damages in Pennsylvania, unless a specific statute allows it. Likewise, the fact the fact that others have won a judgment against a given company in the past does not necessarily mean that said company is guilty of fraud in your case. Each case turns on its own unique facts and circumstances. In Pennsylvania, proof of fraud requires “clear and convincing evidence,” which is a high standard. Hence, it pays to seek a thorough review of all the evidence (and good legal representation) before seeking to move forward.
WHERE MUST YOU FILE SUIT?
Your contract may have a choice of forum clause, requiring that you file suit in the city or state where the invention development company is located. Such a clause may be enforceable. Or, your contract with the invention development company may require that you not file suit in court and, instead, resolve your claim through private arbitration, sometimes AAA arbitration. Click here to learn how arbitration is different (and more expensive) than court.
Our Pittsburgh attorneys offer a free consultation to evaluate evidence and possible suit (or arbitration claim) regarding:
Deception of any kind,
Any failure to deliver goods and services as promised,
Breach of contract,
Failure to protect the confidentiality of an invention idea idea, and/or
Any violation of the American Inventor’s Protection Act.
IS A RECOVERY POSSIBLE?
You need to keep an open mind until you have a lawyer actually look at the evidence in your case. As mentioned above, while it is easy to label a company a “scam,” it may be difficult to prove. Plus, you may have endorsed a contract that gave great discretion to the idea development company in terms of developing or presenting your idea.
You are strongly urged to speak with a lawyer before you post any information online about the idea development company, because (1) your comments may be inaccurate, exposing you to claims for trade disparagement; and (2) anything you say can be used against you (so if you misspeak, and misrepresent a fact, it can hurt your credibility); and (3) statements you make can only inflame the situation and frustrate my firm’s ability to obtain a settlement on your behalf.
In appropriate cases, where the evidence exists, our attorneys sue for breach of contract, which is supposed to make the aggrieved party “whole,” meaning, if you win or settle your case, you may get the return of your money and intellectual property rights to your idea. With claims of intentional misconduct, one can also recover an award for attorney fees, plus punitive damages potentially, depending on the facts in the case.
EVALUATING YOUR CASE
Our experienced Pittsburgh attorneys offer a free consultation about an inventor’s rights. We evaluate whether a claim exists for breach of contract, fraud, unjust enrichment, or a violation of the American Inventor’s Protection Act.
We look forward to hearing from you!
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