Identifying common IP scams and predatory IP marketers

Disclaimer

The information provided in this factsheet is meant as an educational resource only and should not be construed as legal advice. 

New and prospective inventors, along with recent trademark applicants, can be easy targets for common intellectual property scams. 

  • These scams generally fall into one of two categories:
    • Invention Promotion scams.
    • Mail/email registration and payment scams.
  1. Invention Promotion Scams:
    • Heavy advertising to look legitimate: TV ads during late night TV, daytime talk TV, magazines, newspapers, etc.
      • Advertising is generally targeted to vulnerable pensioners, retirees, and young adults.
        • Specious claims of “big money returns for your idea”.
        • Vague communication of earlier successes.
    • Disingenuous Promises often begin with “free” consultation that may include implicit guarantees of an issued patent.
      • Sales Reps for the scammers will respond enthusiastically to every idea, even though many of these ideas are unpatentable due to obviousness or lack of novelty.
    • Over-valued Packages are sold to inventors. With their idea hyped up and the thoughts of $$$ rolling in, inventors will now be pushed on the big scam- a full package that likely includes an evaluation of the idea, marketability report, and a patent.
      • This package tends to include the claim that the idea will be presented and marketed to all the big companies and people connected to the Invention Promotion “Firm”.
      • These larger packages cost upwards of $10-20k and higher.
    • Recycled Prior Art Evaluation/Search Reports are delivered to the inventor, containing canned material with minor edits made for the invention in question.
      • The results shared will be overwhelmingly positive to induce further marketing investment by the inventor.
      • The results will not include any potential prior art or any negative information that could thwart the inventor from purchasing the package.
    • Patent Drafting will be outsourced to the cheapest contractor available, often one in another country or continent who does not speak with the inventor. The work quality will reflect the costs.
      • The scammers will often only file a provisional patent application, which expires after one year.
    • Marketing and promotion will include little more than mailing a description of the invention or a copy of the provisional application to a standard distribution list, including many companies and people who have no interest in investing in IP.

Example 1: Dave is a retired locksmith who has long held an idea in his head- an invention for a barbecue that self-cleans. He does not know how it would self-clean, it’s just an idea. Dave has never researched his idea and does not realize that self-cleaning BBQs have already been invented and are available to buy. Dave sees a commercial for InventScam while watching his late-night syndication shows. He calls and tells them about his BBQ idea. The reps on the phone praise his idea as genius and say he could make millions for his grandkids. He agrees to pay $10k for a search report and patent application. The report he receives talks about how much opportunity there is in his market but does not mention that the idea is unpatentable. A generic provisional patent application is filed, and Dave waits for the phone to ring with investors. It is a call that will never come. After a year, Dave’s provisional patent is expiring, and he does not know what to do. InventScam is not returning his calls or emails. Dave finally contacts a USPTO registered patent agent who informs him that unfortunately he has been scammed, and that his invention already exists.

  1. Registration and payment scams:
    • Your information can become public when you file IP.
    • Scammers will use this public information about you and your IP to send fake invoices, deadlines, and registration or directory options.
      • The premise of these letters may be correct, such as options to file a patent or trademark in another jurisdiction.
      • Some may present as law firms, some as international patent offices- but they will all ask that money be transferred.
      • They will be on official-looking letterhead and the sender will have a legitimate sounding name, like an existing patent agency, law firm, or international patent office.
    • The letter typically implies that the payment must be completed to undertake an action:
      • This could be under the guise of avoiding the loss of IP rights, adding your IP to an official directory, or implying that the action can only be completed by the requesting party.
      • Worst of all are invoice scams implying the action has already been taken and that compensation is owed. None of these are true.
      • Even the less egregious offenders are shady: it may be a legit request from a law firm to file your trademark in another country, but the fees will be 2-3x what you would pay with a reputable law firm or agency and may even be actions you can take yourself for free with minimal effort.

Example 2: Lauren recently applied for the trademark “LaurenCake” at the USPTO, for her cake business. She receives a letter from the International Trademark Authority of Zurich, indicating the need for her to be added to their official directory for $1,749USD. There appears to be an invoice and a return envelope along with the letter. Lauren quickly pays the fee. When Lauren goes to file another trademark application, she asks her trademark agent about ensuring this one is added to the directory. After researching the matter, Lauren’s agent confirms that she has been scammed and that the directory provides no protections or value to her IP.

Key considerations for Canadian companies:

  • “These awful people prey on the uninformed, the vulnerable, and those blinded by prospective success” says Jordan Pynn, Vice President at Stratford Intellectual Property.“If you receive any communication about your IP it should be shared with your attorney or agent. At minimum, search the internet to confirm the legitimacy of the letter and the veracity of the claims therein. Do your homework and don’t rush any activity or payment.”
  • Avail yourself of online resources about IP scams, such as those with USPTO, WIPO, or the FTC:
  • Know your rights: Invention promotion companies in the US are required to provide facts upon request such as how many inventions evaluated over 5 years, the number of positive outcomes from those, how many clients made a profit from their services, etc. Avoid promotion companies looking for money upfront rather than royalties.
  • Get all assurances in writing.
  • Work with reputable IP professionals such as those registered at USPTO, CIPO.

Additional information:

Additional Information

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