Calvin Flowers relates to parents who struggle to keep their teenagers from running up the telephone bill. While growing up, he and his six siblings gave his mother headaches because they abused their phone privileges.
“When the bill arrived, no one wanted to help pay it,” says Flowers, who recalls how his mother unplugged the phone and locked it in her bedroom as a last resort. “But my siblings bought another phone, and the bill ended up being higher than ever.”
Flowers, now 54, a college math major with a passion for computer science and electronics, has a knack for solving problems. To solve the telephone abuse problem for his mother, he created the “Security Jack,” a telephone — locking device that secures the phone at the jack.
When the invention worked, Flowers knew he had something others would want. Using the Security Jack as his first product, he formed a company, Tel — Lock Inc. Today, Tel — Lock offers several models of the Security Jack, and the company has new products in development, including a device to help fight identity theft, and another to enable Website sharing.
The road to success was not an easy one for Flowers. In 1992, the inventor hired a now — defunct invention promotion firm, to help evaluate, develop, patent, and market his invention. “For $500 they did a patent search for me. I was green when it came to the invention industry, and they presented inflated market statistics,” recalls Flowers. “That’s when they told me I would have to pay them $9,500, which I did in three installments.”
Soon after his final payment, Flowers learned that his patent application had been denied. After doing further research, he discovered that one of the firm’s attorneys wasn’t even licensed to be a patent lawyer. “It turns out my patent application had not been filed correctly,” he says. “These companies make you feel so high, then you give them your money and it really bursts your bubble. The experience kills a person’s entrepreneurial spirit.”
Flowers eventually received his patent only to have his idea stolen. After settling out of court in a patent infringement lawsuit, Flowers is restructuring Tel — Lock Inc. by repairing relations with customers who were scared off by the legal battle. His Security Jack product has sold about 50,000 units to date to Walgreens stores, as well as to corporate and government offices.
As Flowers’ experience shows, product development can be a vulnerable stage in the invention process. In their eagerness to develop and market their creations, many inventors fall victim to so — called invention promotion firms that promise much but then fail to deliver. Scores of inventors have lost thousands of dollars to such firms.
Armed with information that can help them recognize warning signs, however, inventors can approach promoters more cautiously. In a consumer alert, the Federal Trade Commission offers tips for “spotting sweet — sounding promises of fraudulent invention promotion firms.” Learning how to “read” these signs will help inventors take ownership of their products and save them time, money, and heartache.
Spotting Frauds
According to the FTC, every year tens of thousands of inventors try to develop and commercially market their ideas. Few inventors have products that become runaway business successes, but with dreams of making it big, many turn to invention promotion firms for help. These companies promote their services through a variety of media outlets but, though some are reputable, fraudulent promoters abound.
Numerous complaints are filed against invention promotion firms each year for fraudulent business practices. Under the American Inventors Protection Act of 1999, inventors can file complaints with the U.S. Patent and Trademark Office (www.uspto.gov). Complaints from inventors and responses by promotion firms may be posted in the Inventor Resources complaint forum on its Website.
In this forum, Davison and Associates (now renamed Davison Design and Development), a firm based in Pittsburgh, received the greatest number of complaints from October 2003 to September 2006. “We receive many complaints from former clients who choose not to go through our compliance and quality control department after they have a problem with the service, [but] instead opt to voice their opinions through the Internet,” says Ben Bowser, the firm’s director of corporate communications. “We do our best to contact these individuals and attempt to remedy any problems.”
Sounded Too Good to Be True
At some point, it crosses everyone’s mind — that million — dollar idea that would be great to turn into a must — have product. Two years ago, Maretta Johnson believed she’d come up with such an idea while driving her family nearly four hours from their home in Canton, Georgia, to visit her mother.
She came up with a diaper bag with a twist — the Total Travel Bag has a built — in cooler and bottle warmer. Her next step was to find a company that would help launch and commercially market the invention.
Johnson, 39, contacted InventHelp, a promotion firm based in Pittsburgh, and scheduled an appointment at their Atlanta office. She became suspicious when the representative didn’t offer to sign a confidentiality agreement that would protect her nonpatented idea. Johnson insisted on having the document signed before sharing her concept.
The discussion became tense when the rep told Johnson that she needed a $900 deposit and an investment of about $10,000 to begin the process of developing and marketing the prototype. “When I heard those figures, I felt I couldn’t do it,” says Johnson. “That’s when [the rep] started talking about making smaller payments, in a plan. That was a red flag for me because I knew they were only trying to make a sale.”
Johnson walked away from the meeting, frustrated by the possibility that her invention would never make it to the marketplace. “I immediately went home and let InventHelp know that I was no longer interested in their services,” says Johnson. She asked them, in writing, to retain the nondisclosure agreement.
Nicole M. Hait, manager of corporate communications at InventHelp, defended the firm’s practices. “InventHelp’s policy is to have an inventor sign a nondisclosure agreement before we view the invention. If an inventor was not offered a nondisclosure, then it certainly was a mistake. Concerning the deposit, we would only ask for one if the inventor wanted to move forward with our services.”
Determined to see the process through, Johnson began her own online research. “I went to the U.S. Patent and Trademark Office Website, which gives you all the steps you need to follow,” recalls Johnson, who hired an attorney to help her with the patent application. “When searching for a manufacturer, I drew up a nondisclosure agreement, which I had them sign before sharing my idea with them, and I chose the best manufacturer for me and my product.”
Because of her experience with InventHelp, Johnson took a more cautious approach to hiring help, and her caution paid off. She applied for a patent in April 2005, and the Total Travel Bag now has a patent pending. She estimates she invested only about $2,400 to get her product to market.
Last spring, Johnson left her job as a paralegal to work full time on building her company, Jaz Innovations Inc. Her Total Travel Bag (www.totaltravelbag.com) is sold in baby boutiques, on TV, and via the Internet, including at BabyUniverse.com. Johnson is currently in negotiations with two major retailers, Target and Seventh Avenue, to carry the bag. Sales in 2006 reached 2,800 units and $280,000; her profits were $98,000.
Helping Black Inventors
In 2003, Flowers founded the Chicago 1st Black Inventors/Entrepreneurs Organization (www.cfbieo.org)
to help guide inventors through the development process. “When I was working on getting my product to market, I got a lot of help from my community,” says Flowers, who lives in Chicago. “Friends, family, and neighbors all scraped money together until I had enough to get my product patented and manufactured.” He is determined to return the favor.
The organization has 75 members, all of whom have been helped by its services, which include providing members with idea evaluations, invention process workshops, market strategies, and guidance from the group’s carefully screened network of attorneys, manufacturers, and marketing professionals. Flowers adds, “African Americans have always been inventive, but we haven’t always known that our ideas have value or enjoyed the associated wealth.”
Be Smart: Determine the Legitimacy of an Invention Promotion Firm
Get what you pay
“Our philosophy is that inventors should be in the business of cashing checks, not writing them,” says Michael Collins, CEO of Big Idea Group (www.bigidea group.net), a well — respected invention promotion firm that profits only by receiving a percentage of the royalties earned on a successful product.
Investigate promotion firms before giving them any money. The American Inventors Protection Act of 1999 grants inventors the right to ask promoters about their work history. Before a promoter can enter into a contract with you, a rep must disclose the following information about the firm’s business practices during the past five years:
How many inventions the firm has evaluated
How many of those inventions received positive or negative evaluations
Its total number of customers
How many of those customers received a net profit from the promoter’s services
How many of those customers have licensed their inventions due to the promoter’s services
Always check a company’s references by asking for names of clients. Be suspicious if they give you only a few names; these individuals might have been hired to give favorable testimonials. Call the USPTO, the Better Business Bureau, and the Attorney General in your state and in the state in which the company is based to inquire about complaints.
Helpful Government Agencies and Non — Profit Organizations:
Chicago 1st Black Inventors/Entrepreneurs Organization, www.cfbieo.org, 708 — 201 — 8092
Federal Trade Commission, www.ftc.gov, 877 — 382 — 4357
National Congress of Inventor Organizations, www.inventionconvention.com/ncio, 877 — 807 — 4074
The Pitch Coach, www.thepitchcoach.com, 313 — 320 — 2989
United Inventors Association, www.uiausa.org, 585 — 359 — 9310
U.S. Patent and Trademark Office, www.uspto.gov, 800 — 786 — 9199