H.R. 2419 is designed to rein in the deceptive and often fraudulent practices of so-called invention development companies, which prey upon inventors, and upon the larger universe of those who aspire to being inventors.
This is not a new phenomenon. At a Senate hearing last year on the topic of invention marketing scams, one university researcher testified that he has monitored and found these practices to have been carried out for at least 20 years. I personally have monitored these practices throughout my almost 40 year career as a patent lawyer.
Over the many years these practices have persisted, a number of consistent features have been present. First, they are focused on the exploitation of those who believe they are, or could be, inventors of patentable subject matter. They do not target their services toward the research and development departments of major corporate enterprises, but rather upon independent inventors, most often first time or one time inventors.
The representation of this type of inventor as eccentric, absent-minded, and naive-"Crazy Old Maurice" of Beauty and the Beast, if you will - is, no doubt, unjustifiably stereotypical and inaccurate. Nonetheless, it is probably true that many inventors targeted by invention development companies bring to their creative efforts a degree of dedication and passion which is not matched by an ability to realistically evaluate their own efforts. At the same time, they also may lack even a rudimentary understanding of our patent system and be unsophisticated in what is necessary and possible to turn their efforts into commercial success.
In short, they are victims waiting for an unscrupulous invention development company to happen.
When a potential customer contacts such a company --usually after seeing a television or print media advertisement-- the contact sets in motion a chain of events which has common features over time and independent of the merits of the potential invention.
First, the potential customer who contacts the toll free number of the invention development company is asked to provide a description of his or her invention.
In the hands of the unscrupulous invention development company, the invention instantaneously develops tremendous potential for patenting, successful development, and marketing. Actual merit does not appear to play a factor in this evaluation.
In one case, a journalist, interested in testing the outer limits of an invention development company's unbridled optimism, submitted a proposal for a unique automobile "cruise control" device. It consisted of a device for bolting the accelerator pedal, depressed to achieve the desired speed, to the floor of the car. A report came back that department stores all over the country were waiting to put this stroke of genius on the market, perhaps anticipating that motorists were dying to put it in use.
Along with the favorable initial report, the customer receives the initial bite: a solicitation for fees to finance some sort of feasibility study, which may or may not include a patent search. The fee is typically several hundred dollars, often as much as $1,000.
Not surprisingly, the report that results is invariably also favorable, albeit couched in generalities and lacking any meaningful specificity regarding the proposal at issue. The existence of voluminous prior art, and the absence of elements such as novelty, usefulness, and nonobviousness are, of course, not causes to render an unfavorable report.
Sometimes the bogus invention development company actually assists the customer in applying for and receiving a patent. However, the patents are often narrow or not well written, or both, or are design patents, which provide little if any real patent protection to the customer whose need is for a utility patent. Furthermore, even these relatively useless claims are often vulnerable to legal challenge. For example, when someone working for the company adds the ornamentation necessary to support a claim for a design patent, the applicant (the customer) is not the inventor, and is not entitled to a patent.
For customers that fail to see the writing on the wall and cut their losses, invention development service fees grow larger as the pitch moves to invention development and marketing. Here again, the actual services provided are minimal, such as providing a list of names and addresses of corporations for the customer to write to in order to solicit financial backing.
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