An invention marketing company, also called an invention promotion company, is paid to sell your idea rather than to build it. The service offered is typically an evaluation of commercial potential, a written report, and an attempt to place the invention with manufacturers for a license, paid for by fees from the inventor. Nobody in that arrangement engineers your product.
Thank you for reading this post, don't forget to subscribe!Promotion is a real service that some firms perform honestly. It is also the one category of vendor Congress singled out for mandatory disclosure obligations, after a run of federal enforcement actions in the 1990s. That history is why a specific set of numbers exists that you are entitled to ask for before paying anything.
What an invention marketing company sells
The offer usually arrives in stages, each with its own fee:
- An initial review or “invention evaluation,” often low cost or free.
- A paid market research or commercial potential report.
- A larger fee for a submission package, sometimes including a design patent application or a rendering.
- Submission of that package to companies on a mailing list.
Federal law defines the service narrowly. Under 35 U.S.C. 297, “invention promotion services” means “the procurement or attempted procurement for a customer of a firm, corporation, or other entity to develop and market products or services that include the invention of the customer.” That describes finding someone else to do the work, not doing the work.
How the licensing and royalty model is meant to work
In the model as described to inventors, the firm places the invention with a manufacturer, a license is signed, the product sells, and the inventor receives royalties which the firm shares. Every step after the first depends on a third party agreeing to something. Two questions separate the model as described from the model as operated:
- Where does the firm’s revenue actually come from? If it comes primarily from inventor fees rather than from royalty shares, the firm is paid whether or not your invention is ever licensed.
- What is submitted, and to whom? A submission to a curated list of companies with a stated interest is different from a mass mailing, and the difference is visible in the response record.
In one 1996 enforcement matter, the Federal Trade Commission’s consent judgment required a Virginia promotion firm to notify its own customers in writing that since its inception in January 1994, not one of its clients had received profits of any kind from an invention as a result of the firm’s services. The same release stated that 99 percent of the patents that firm’s attorneys filed or obtained were design patents, which protect appearance rather than how something works.
How it differs from a development company
Nobody is engineering your product
This is the distinction most often blurred in a sales call. A development company is paid to make a product exist. A promotion company is paid to look for someone else who might.
| Invention marketing company | Product development company | |
|---|---|---|
| What you buy | Evaluation, report, submission | Engineering work and a design |
| Deliverable | A document and outreach | Drawings, files, working hardware |
| Who is paid by whom | You pay fees upfront | You pay for defined engineering scope |
| Success depends on | A third party licensing it | The work being completed |
| Engineers involved | Typically none | The core of the service |
If what you want is a product that exists, the relevant vendor categories are set out in who can help me build my product idea.
Why the category has a contested reputation
The reputation is a matter of public record. In July 1997 the FTC announced Project Mousetrap, seven coordinated law enforcement actions against invention promotion firms, five brought by the FTC and one each by the Pennsylvania and Florida attorneys general, alongside a task force with the USPTO and the Department of Justice. The FTC’s Bureau of Consumer Protection director said at the time that “virtually no consumers have even made back their investment.” That statement is from 1997 and describes the firms in that sweep, not current measurement. Congress responded with the American Inventors Protection Act of 1999, whose Inventors’ Rights Act subtitle created the disclosure duties now at 35 U.S.C. 297.
Enforcement continued after that. A 2018 stipulated final order in the FTC’s case against World Patent Marketing imposed a judgment of $25,987,192, partially suspended on payment, and permanently banned the defendants from the invention promotion business. Cases are decided on their own facts, and enforcement against some firms says nothing about any particular company trading today.
Disclosures you are entitled to ask for
Success rate and outcome disclosures
This is the practical value of the statute. Under 35 U.S.C. 297(a), an invention promoter has a duty to disclose the following in writing to a customer prior to entering into a contract for invention promotion services:
- The total number of inventions evaluated for commercial potential in the past five years, and how many received positive and how many received negative evaluations.
- The total number of customers who have contracted with the promoter in the past five years, not including customers who purchased trade show services, research, advertising, or other nonmarketing services, or who defaulted on payment.
- The total number of customers known by the promoter to have received a net financial profit as a direct result of its services.
- The total number of customers known by the promoter to have received license agreements for their inventions as a direct result of its services.
- The names and addresses of all previous invention promotion companies with which the promoter or its officers have been affiliated in the previous 10 years.
Item three is the one to read first. It is the firm’s own count of customers who made money. No public database of these figures exists, because the disclosures go to individual customers before contracting rather than being filed with any agency. Requesting them in writing and keeping the response is the most useful thing an inventor can do at this stage.
Fee structure and what it buys
The FTC’s consumer guidance on invention marketing scams lists the signals worth noticing: promises that profits are assured, claims of a proven market without evidence, large upfront fees in place of royalty-based compensation, boilerplate research reports, and refusal to state the total cost. It advises getting the total cost of all services up front and independently verifying references that you select rather than ones the firm supplies.
Section 297 also provides a remedy. A customer found by a court to have been injured by a material false or fraudulent statement, or by an omission of material fact, may recover reasonable costs and attorneys’ fees plus either actual damages or statutory damages of not more than $5,000, and a court may increase damages up to three times the amount awarded where the promoter acted with intent to deceive. Whether any of that applies to a particular situation is a question for an attorney.
Questions to ask before paying anything
Ask these in writing and keep the answers:
- Please provide the five disclosures required under 35 U.S.C. 297(a).
- What is the total cost of every stage, including any I have not yet been offered?
- What proportion of your revenue comes from client fees rather than from royalty shares?
- Which companies received a submission of an invention like mine in the past year, and how many responded?
- Is any patent application you prepare a design or a utility application, and who is the registered practitioner responsible?
One check is worth doing independently. The USPTO publishes complaints it receives about invention promoters, along with the promoters’ responses, under 37 CFR Part 4, which states that the Office will not conduct any independent investigation of the invention promoter and that civil remedies must be pursued by the injured party without the Office’s involvement. The USPTO separately states on its complaints page that it removes all published complaints and responses three years after publication. A clean record there is weak evidence of anything. A complaint there is worth reading.
What to do instead if you want a product built
If the goal is a physical product rather than a license, the money is better spent on engineering. Several free or low-cost public resources exist first.
- USPTO Patent Pro Bono Program. Matches volunteer patent attorneys with financially under-resourced inventors for free legal help preparing and filing an application. Eligibility turns on gross household income below three times the federal poverty guidelines, plus a demonstration of basic patent-system knowledge, normally a provisional application already on file or a completed USPTO training certificate. Government filing fees are separate.
- USPTO Pro Se Assistance. Free one-on-one help for applicants filing without a practitioner, covering application types, fees, forms, and procedure. USPTO staff cannot give legal advice or patentability opinions.
- USPTO Law School Clinic Certification Program. More than 70 participating law schools, where supervised students prepare and file applications at no cost to the client.
- SBA resource partners. Small Business Development Centers, SCORE mentoring at no cost, and Women’s Business Centers offer business counseling and planning support.
- NIST Manufacturing Extension Partnership. State-designated centers advising small and medium manufacturers. Centers charge for services, and the program becomes relevant once there is something to make.
When you are ready to pay for engineering, the vendor types differ. A firm that designs and engineers but hands off before production is described in what a product development firm is, and the selection process is covered in how to choose a hardware product development partner. If patent timing is the open question, see what a provisional patent is.
Frequently asked questions
Are invention marketing companies legal?
Yes. Invention promotion is a lawful service, subject to the disclosure duties in 35 U.S.C. 297 and to general consumer protection law. The disclosure requirements exist because the category attracted federal enforcement, not because the activity is prohibited.
What if a firm refuses to give the required disclosures?
A refusal is information in itself, and the statute provides a civil remedy for customers injured by material false statements or omissions of material fact. Whether a specific refusal gives rise to a claim depends on the facts, so consult an attorney.
Does a positive evaluation report mean my idea is good?
Not on its own. Ask how many evaluations the firm issued in the past five years and how many were negative, which is disclosure item one. An evaluation process that rarely says no is not selecting for commercial potential.
Is a design patent enough to protect my invention?
A design patent protects ornamental appearance, not how something works. If the value of your invention is functional, a design patent may not cover what matters. A patent attorney can advise which type suits your invention.
How do I check a company’s record?
Search the USPTO’s published invention promoter complaints, check the FTC and your state attorney general, and ask for references you choose yourself rather than ones supplied to you. Remember that USPTO complaints are removed after three years, so an empty record proves little.
Where Inventornest fits
Inventornest is a product development company, paid to design and engineer hardware rather than to look for someone who might license it. The practical difference is what arrives at the end: drawings, design files, and working hardware you own, instead of a report and a submission list. Early-stage projects usually start with electronic product development for startups, where the first goal is establishing whether the idea can be built at a sensible cost.
If you are weighing an offer from a promotion firm, ask for the section 297 disclosures before deciding anything. To talk through what building the product would involve instead, book a free consultation.