"Inventions wanted . . . no idea is too small."
"Ideas, inventions wanted! Can be turned into cash!!!"
If you are one of those enterprising inventors whose eye, or purse, has been caught by ads like the one above, the news is both bad and good.
The bad should be obvious by now: no one has been pounding on your door with fists full of money for your tick trap.
The good news is that the perpetrators of ads like these - who pronounced your tick trap "great," "well-conceived," assured of "tremendous profits" and "substantial sums in royalty returns," then took your non-returnable money and ran - may be going out of business.
Over the past several years, the Federal Trade Commission has investigated and taken formal action against four "idea promotion" companies. Three of them subsequently signed consent decrees and went out of business; the fourth, Raymond Lee Organization, a New York-based firm, is still awaiting the FTC's final decision.
Last month, the Securities and Exchange Commission charged an Alexandria firm, International Inventors Incorporated, East (an offshoot of one of the now-defunct companies), with violating securities regulations. The firm signed a consent agreement to cease and desist.
What the FTC found in the course of its investigation of the $100 million idea promotion industry should confirm the worst suspicions of a cynic.
One firm had $1.2 million worth of contracts with 1,264 clients, not a single one of whom had made any money. Two other firms, raking in $5 million in fees from contracts with more than 7,000 consumers couldn't name even one successful client. Raymond Lee Organization and Lawrence Peska Associates, two New York companies, have charged 30,000 clients $1,000 to $2,000 in fees. Of those, only three have ever profited from their inventions.
The process of deception owes its success to two fundamental traits - not only of inventors, but of mankind in general, vanity and gullibility.
With minor variations, the process works like this: As soon as you answer the ads, the promotion company callls you and your invention in for show-and-tell. During this session, you are also urged to file a disclosure document.
The function of this piece of paper is explained to you by an "account executive" whose knowledge thereof is half-baked at best. In any case, you aren't listening too carefully because your head is filled with fantatatasies of fame and fortune, inspired by the executive's compliments ("your invention sounds great," etc.).
Somehow, you assume that the disclosure document is a patent or some version of it.
In truth and fact, as the courts say, the disclosure document provides no patent protection. Routinely logged at the Patent Office and held for two years, the document is simply a description of the invention and establishes nothing more thtthan the date of conception.
The second step in bamboozlement usually takes the form of an "evaluation" by the promoters. Expert advice is offered by "specialists" in "sophisticated technical fields" at no cost.
The gratuity becomes clear when you consider that a) the evaluation is invariably favorable, and b) not much expert evaluation is done, anyhow. As one FTC lawyer testified before the Maryland House of Delegates, "the date included in such reports is generally gleaned from documents available at most public libraries and relies heavily on census data which can be applied to an endless number of inventions."
Included in these evaluations are statistics and economic projections: impressive data pointing to the infallible success of your invention. You are told that it will be sure-fire success, because as long as there is a market for dogs there will be a tick problem, and as long as there is a tick problem there will be a demand for effective tick traps.
So far so simple-minded. Now comes the nitty-gritty: the patent search, to ascertain that no one else has come up with a comparable flash of genius. The promoters offer to take on this dismal task for you, to wade through tidal waves of patents - for a small fee of about $250.
This seems reasonable enough; after all, the fee for filing an application alone is $65, the balance in keeping with what lawyers charge.
But what they fail to tell you is that your patent may be rejected, requiring an appeal that costs more money. Or that even if the patent is issued, more money will be needed to cover such extras as the company's percentage in the patent after it's issued - or the cost of refining your invention and presenting it to manufacturers.
By now you are hesitating, wondering if your little bug killer is really worth such a huge investment. On the other hand, the urgency is overwhelming. "The more time you spend thinking about this thing," you are told, "the more chance there is for someone to come into the patent office and get the same idea in ahead of yours."
If the tick idea seems of superior stature to these crude examples, don't be too smug.
Executives of Raymond Lee Organization, the promotion company still awaiting a final FTC order, testified that unless you were trying to market an object of "perpetual motion," a cancer cure, a hair grower, a bust developer, printed matter, business techniques or "anything that was very obscene or very far out . . . but it would have to be pretty bad," they would take on just about any invention.
The "information kits" handed out by Raymond Lee Organization are sprinkled with assorted gems of endorsement. These include "words of praise from some prominent national leaders" - judiciously edited from unsuspecting letters from congressmen and senators, many of whom have complained about the unauthorized use of their letters and photographs.
The brochures also contained photographs of a nun and a priest, and one of former New York City Mayor John V. Lindsay awarding "a declaration of commendation" to Raymond Lee. (TThe commendation turned out to be a Department of Commerce public service program to boost small business in New York City.)
The same photograph, featuring Lawrence Peska - who has since started his own promotion firm under litigious circumstances - appeared for a while in Peska's own promotional brochures. The picture, he granted, had to be retouched; but it wasn't entirely dishonest. He told the New York Times, "Mr. Lindsay and I did appear together at the presentation ceremony, and several pictures were taken of us together."
Such enterprise is indicative, among other things, that many more people can be fooled much more of the time than we think.
But Lawrence Peska sees himself as fulfilling not just an entrepreneurial but a spiritual role as well. Likening the promotion business to the vanity publishers, he says, "for those more inclined to mechanical and physical creativity, inventing is their outlet, and Lawrence Peska Associates can assist them."
Tinker on, talented tick trappers. But be wary.