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Avoiding traps

There are many, many traps an inventor could fall into, you will find on this website details of the precautions you should take at every stage of developing your invention. Perhaps the greatest danger to the inventor is himself or herself–

  • Inventors could be over-confident and omit the some critical steps – like failing to evaluate the economic potential of the invention before spending money on IP protection and/or prototyping.
  • Inventors could lack conviction and determination to see it through – developing an invention can be a long and trying process.


And there could be other dangers – from SHARKS. Over the years, it has been demonstrated that only about 3% of inventions succeed. (The US Patent Office estimates that about 97% of all US patents issued each year will never make enough money to even pay for the patent). Sharks swim around in the "sea" of the remaining 97% of hopeful inventors looking for help in developing their invention. The inventor needs to be on constant guard in case of scams.

Scam Warning Signs

This warning comes from the US Patent and Trademark Office

Dear Inventor,



Warning Signs

  • Slick ads on radio,TV and magazines.
These are the first "hooks".
  • Refusal to respond to your questions in writing signed by a company official.
Legitimate companies provide the answers in writing.
  • Salespersons will want money right away... up-front.
  • You are told to describe your idea in writing, mail it to yourself and don't open it.
This is useless advice.
This should be provided to you.
  • You are guaranteed to get a patent or your money back.
No one can guarantee issuance of a useful patent.
  • You are advised to apply for a design patent (Registered design in Australia).
This type of patent has limited applicability to most inventions.
  • You can't reach sales people or company officials without leaving many messages.
Maybe there is no real office location or company.
  • You are told that your idea is a "sure-fire" hit!
Probably every client of this company is told that. Be sceptical.
  • Refusal to provide client references or copies of forms and agreements for your review.

Get at least five names to contact and show the forms to an attorney before signing.

Beware of the "hooks" that lure you into a scam

Unscrupulous invention promotion, marketing or licensing companies use a series of "hooks" to lure you into the company's web:

  • 1st the "free" inventor's kit;
  • 2nd phone calls to get your money for an invention evaluation;
  • 3rd the evaluation then leads to a request for more money to create a report;
  • 4th the "report", in a nicely bound book, says that your invention is patentable and marketable; and
  • 5th now there is need for more money to continue the process of getting a patent and marketing your invention.

Beware of the "hooks"

A little research can save a lot of money, ask questions

Get answers to these questions in writing from any promotion, marketing or licensing company wanting to help you. Helpful hints are given in the brackets.

  1. Total number of inventions evaluated for commercial potential in the past five years by the Company. How many of those evaluations were positive, accepted by the Company. How many were negative, rejected by the Company.
  2. Total number of customers, known by the Company, who have received a net financial profit as a direct result of the Company's promotion services. What is the Company's success rate over the past five years [that is, the number of who made more money from their invention than they paid]?
  4. Total number of customers, known by the Company, to have received license agreements for their inventions as a direct result of the Company's services. [If the success rate is low, say less than 5%, then think about going elsewhere].
  5. How many customers have contracted with the Company for promotional services in the past 5 years; excluding those who have purchased trade show services research, advertising or other non-marketing service: and excluding those who have defaulted on payment to the Company.
  6. Is there an up-front fee and, if so, how much is it and what are you getting for it? How much will the complete process cost from submission of my invention to obtaining a patent and a licensing agreement? [Reputable firms have relatively small, upfront or other fees because they make their real money from successful royalty arrangements for the inventions they accept].
  7. Has the Company ever been investigated by or been in trouble with the Federal Trade Commission, Better Business Bureau, any consumer protection agency or Attorney General's Office and if so, when and where?
  8. Who selects and pays for the patent attorney or agent to do the patent search, patentability opinion and patent application preparation? [You should be able to select your own, because the attorney or agent represents you, not the Company].
  10. Does the Company provide a written opinion of the "marketability" (that is, potential success) of your invention?

DO's and DON'T's

Write a letter to any promotion, marketing or licensing company that seeks to help you and ask for written answers to the 10 QUESTIONS listed above.

Accept verbal promises, assurances or representations.

Use common sense in evaluating the answers. If they don't make sense, seek assistance from a patent attorney or agent* or, the Office of Independent Inventor Programs at the United States Patent and Trademark Office.

Be a victim of a scam.

Why so many new products fail

Why so many new products fail - You have a new product you intend to launch at the public? Don't risk it: Not until you have done a little hard research.

According to a Bank of America report, as many as 90 per cent of all new products introduced in the US fail, usually within four years. The proportion of failures elsewhere in the world is probably as high.

The report says that "weaning the infant too soon" is the biggest mistake made by the inventors. It adds: "Objective analysis about the product and its market with the help of outside assistance makes the chances of success more probable."

Here are some of the reasons why products fail, and roughly in order of frequency:

Inadequate market analysis, product defects, higher costs than anticipated, poor timing, competition, insufficient marketing effort, inadequate sales force and weakness in distribution.

And here are some of the pre-marketing questions that ought to be asked but often aren't:

  • What needs does the product satisfy?
  • What are its good and bad qualities?
  • Are its size, shape, colour, style and design practical and appealing?
  • Is it superior to its competition?
  • Is it adequate in its present state?
  • Are all the "bugs" out of it?
  • Should it be changed - simplified?
  • What are its seasonal characteristics?
  • What will be its influence on the market?


If an inventor can answer these questions satisfactorily, he may be on a good thing. As a double check, he can always try the product on his wife.

(Reprinted from International Management September, 1965.)

ACCC - The little black book of scams

The little black book of scams highlights a variety of popular scams that regularly target Australian consumers and small business in areas such as fake lotteries, internet shopping, mobile phones, online banking, employment and investment opportunities. It also offers consumers tips on how to protect themselves from scams, what they can do to minimise damage if they do get scammed and how they can report a scam.

A printed version of this publication is available at no cost from the ACCC or an electronic version of this publication is downloadable at no cost from

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