Inside INPEX and InventHelp

By Mike Drummond

Editor’s note: This story appeared in our September 2008 issue. Inventor’s Digest has no relationship – unofficial or otherwise – with the planning or production of INPEX.

Patent attorney David DeMay is seated alone at his information booth inside INPEX, the largest inventor tradeshow in the nation. He looks a little nervous.

He is among some 300 other exhibitors at the 24th annual, four-day event, held this past June at the bright, cavernous David L. Lawrence Convention Center in downtown Pittsburgh. About 1,500 people are on hand, including representatives from Bosch, Hasbro, Newell Rubbermaid and even The Tonight Show With Jay Leno.

But that’s not why DeMay appears slightly ill-at-ease. He’s seated across from a member of the media. He chooses his words carefully.

At INPEX’s request last year, DeMay posted a link to the show on his Web site.

“Unfortunately,” says DeMay, “within 24 hours at least four or five colleagues called and said, ‘What are you doing having this on your Web site?’ That made me think about not attending.”

Invention submission company InventHelp, a trade name of Invention Submission Corp. (ISC), also known as Western Invention Submission Corp. and a division of Technosystems Consolidated, is the driving force behind the Invention & New Product Exposition or INPEX. InventHelp is among the major invention submission companies critics call a scam. In 1994, without admitting guilt, the company settled allegations of fraud with the Federal Trade Commission. InventHelp has been the target of lawsuits and consumer complaints. Entire Web sites are devoted to warning inventors to stay away from the company.

A LexisNexis search of court records shows that InventHelp has never been convicted of fraud or wrongdoing.

Yet when it comes to INPEX, there’s a risk of guilt by association.

DeMay is back for a second time. He says he’s “pleasantly surprised at the quality of the show and the staff, but disappointed at the amount of misinformation or incomplete information that the average independent inventor seems to have.”

Many don’t know the difference between a design and utility patent. Or think a provisional patent application is the same as a patent. DeMay is here to educate. Maybe land a client or two.

“I figured – what’s a nice way to put it – a doctor has to go to where the sick people are,” he says. “I’ve got the information.”

A few hundred feet away, past rows of booths where exhibitors plunked $1,300 to $1,800 a pop, sits the man behind the INPEX curtain, Martin Berger.

Veiled from public view by a wall of black fabric in the INPEX VIP lounge, Berger fields my questions about the show, his InventHelp business and his pariah status in certain inventor circles. In an interview spanning nearly two hours, Berger also takes aim at critics, particularly those affiliated with the United Inventors Association or UIA, which has had a longstanding hate-hate relationship with Berger’s privately held empire.

“Ninety percent of our customers tell us that our work is good to excellent,” Berger says. “Ninety percent. But if the invention doesn’t sell, you will see a complaint…. Inventors cannot believe it if companies are not interested in their inventions.”

He notes the show has helped inventors land licensing deals, including the Spin Pop lollipop and Rock Bottom Slots slot machines, among others.

“I think that we’re improving our reputation,” he says. “But you will always see people who are unhappy with our company, with virtually any invention submission company, whether the company was honest or dishonest.

“Why do we get complaints?” he adds. “It’s kill the messenger.”

InventHelp doesn’t evaluate products, he says. That’s for other companies and consumers to decide. InventHelp’s job, he says, is to present inventors’ products in the best possible light.

As he talks, industry experts are offering educational seminars upstairs on how to best commercialize products. In other rooms, representatives from the likes of Hasbro, Newell Rubbermaid and Bosch are evaluating inventions face-to-face with inventors. Elsewhere on the exhibit floor, a representative from Ronco is prowling for new products to add to the company’s iconic line. And a long queue forms where the crew from The Tonight Show is filming hopeful inventors.

Black and White

At 71, the white-haired Berger is spry and fit. Thirty years of racquetball will do that for you. He launched Invention Submission Corp. in 1984. A decade later, the FTC reached an out-of court settlement with Berger after a five-year investigation. The government claimed Berger’s company “misrepresented the nature, quality and success rate of the promotion services it sold to consumers.” Under the terms of a consent decree, ISC set up a $1.2 million account to pay refunds to customers.

“We don’t hide anything, we don’t disguise it,” he says. “We really have gotten better. If you were to ask me the one thing that allowed this company to grow, it’s that FTC consent decree.

“I thought we were winning the war,” he adds. “It was costing them and us a whole lot of money. They basically were reasonable. They said, ‘Look, all we want to be sure of is you guys are telling the truth to inventors.’”

FTC officials declined to comment for this article.

“We were then and are now a business that employs commissioned salespeople,” Berger says. “To make a sale of anything salespeople sometimes bend the truth. We have fired every salesperson who fails to comply with the FTC.”

Although it doesn’t name names, the U.S. Patent and Trademark Office estimates that inventors stand to lose close to $300 million each year from fraudulent invention submission companies.

Before, during and since the FTC settlement, Berger has been battling accusations that his Pittsburgh-based company misleads inventors, who often pay $12,000 or more for InventHelp’s services. Complaints essentially accuse InventHelp of not doing enough to get products to market. InventHelp, the accusations continue, lures inventors to spend more money on marketing and other services of dubious value.

Two such complaints are on the USPTO Web site. The office does not investigate the veracity of those complaints; it merely posts them.

InventHelp’s Web site states: “From 2005 to 2007, we signed submission agreements with 5,959 clients. As a result of our services, 98 clients have received license agreements for their products, and 20 clients have received more money than they paid us for these services.”

Twenty out of 5,959. In other words, those inventors had a 0.3 percent chance of making more money in royalties than they paid InventHelp.

“Every one of our contracts has not one, but probably three or four boldface boxes that says – written by the FTC, by the way – that this is a high-risk expenditure. And we write in, you’re not likely (to achieve) success.

“Now, do our salesmen hit (prospective clients) over the head with a sledgehammer and tell them this?” he adds. “No.”

(In a follow-up conversation, Berger said his sales teams actually go to great lengths to describe the risks and reiterate the slim chances of market success.)

John Carpenter, a venture capitalist from Orlando, Fla., has invented a medical device worn on the wrist. He says he’s spent about $15,000 on InventHelp services, which included recommending he secure a utility patent.

This is his first time at INPEX, where he’s meeting about potential licensing deals. He says he investigated alternatives to bringing his product to market, including research through his attorney. He says the risks were fully disclosed, in writing, in the contracts he signed with InventHelp. He says he likes the “one-stop shopping” aspect of the company.

“You couldn’t get any more of a disclosure,” he says. “For someone to bitch that they gave money to InventHelp and they didn’t do what they said they were going to do, it’s their own fault.

“People have a way of ignoring what they’re told point blank. They say, ‘Oh, that doesn’t apply to me.’ But it’s my responsibility to have a good product,” Carpenter adds. “With all the disclosure, how the heck can I hold (InventHelp) responsible?”

Friction

Amid a slumping economy, anecdotal evidence suggests more people are seeking financial relief by developing homegrown inventions. Attendance and corporate representation at INPEX is up from last year. Companies increasingly are turning to outside innovation for new products. And invention submission companies report an uptick in business. As competition for these inventors and their new products increases, so seemingly has friction among those in the invention industry.

Bonnie Griffin Kaake, executive director of the United Inventors Association, has never attended INPEX but says she has heard from others that Berger uses the event to woo naïve inventors to InventHelp or its licensing arm, Intromark Inc.

Kaake also relates anecdotes of those who paid InventHelp $5,000 to $30,000 for what she deems virtually worthless design patents, which only cover the appearance of products, not their utility or uses.

“We don’t advertise INPEX or recommend ISC,” Kaake says. “We don’t agree with (InventHelp’s) practices. Because of that, we cannot recommend an inventor go to that show.

“Just mention ISC and INPEX,” she adds, “and bristles come up in the ‘informed inventor’ community.”

Berger insists Kaake is confusing his company for one of its competitors and that InventHelp doesn’t herd clients to secure design patents. He also maintains INPEX and InventHelp are separate. However, attendees are welcome to visit the InventHelp booths. Berger says INPEX exhibitors are mostly do-it-yourselfers. His InventHelp clients, he says, tend to want a full banquet of marketing, research and patent-referral services.

“Are we out here marketing our services to the exhibitors? Shockingly, no,” Berger says. “Are we not doing that because we’re idiots? No! These aren’t the same people buying our services. You’ll look long and hard to find a complaint about INPEX.”

Lisa Lloyd, owner of Lloyd Marketing Group in Arizona and a former UIA board president, recalls that after the FTC settlement and her tenure at UIA Berger hired her to do some consulting work. He wanted to increase his company’s licensing success rate, she says.

“I was blown away he’d even call,” she says. “He implemented most of what I recommended,” which included adding educational seminars at INPEX, inviting corporate buyers to the event, and setting up INPEX booths at other industry tradeshows so inventors could display their products.

Lloyd had run-ins with her UIA colleagues. She says the UIA focused too much on bashing the Martin Bergers of the world instead of helping inventors commercialize products.

The UIA’s focus is to provide information, support  and opportunities for inventors and entrepreneurs. Kaake concedes the UIA had spent too much time worrying about invention submission companies. She says that changed in 2007, when she became executive director. It’s now more focused on fostering business acumen among independent inventors, she says. She cites the UIA’s recent partnerships with private enterprise and the National Hardware Show in Las Vegas.

INPEX Redux

Back on the INPEX floor, attendees and exhibitors from as far away as Malaysia are networking and booth cruising.

One exhibitor tells me he’s disappointed in the traffic.

“I thought there would be more company reps coming by,” says Peter Egigian, whose sister is showcasing her thermal wall cover invention.

Jerry Brandenburg, a longtime InventHelp client, grouses that his Dry Fast energy-saving blanket that speeds clothes-drying time isn’t displayed at InventHelp’s licensing wall at the front of the exhibit. He doesn’t recommend using InventHelp. “I’m not sure about their marketing efforts,” he says, “but there’s no hard feelings.”

As for INPEX: “I definitely would recommend it.”

Of dozens interviewed, none says they’ve been proselytized by InventHelp.

Brian Daigle of online inventor community and service provider IdeaTango is holding court at his booth. It’s the second day of the show, and traffic has picked up since yesterday.

For sheer concentration of inventors, new products and networking, INPEX is, in his estimation, “The best invention trade show by far.”

“Maybe InventHelp,” he adds, “is changing its ways.”

Jerry Wojcik, director of business development at Irwin Industrial Tools, and three colleagues evaluated some 50 products during INPEX. The company is taking a closer look at about a dozen.

INPEX is “the best I’ve seen and I’ve seen tradeshows around the world,” he says. “It’s better than going to the hardware show in Vegas. You see the same thing over and over again” there.

Wojcik says a larger contingent from parent company Newell Rubbermaid will attend next year.

“If you want to see what people who are coming up with and how to make things better and more efficient,” he says, “you’ve gotta come to this show.”

[Box

The American Inventors Protection Act of 1999 gives you certain rights when dealing with invention promoters. Before an invention promoter can enter into a contract with you, it must disclose the following information about its business practices during the past five years:

• how many inventions it has evaluated,

• how many of those inventions got positive or negative evaluations,

• its total number of customers,

• how many of those customers received a net profit from the promoter’s services, and

• how many of those customers have licensed their inventions due to the promoter’s services.

Check References

  • Ask the promoter to give you the names of many previous purchasers so that you can pick and choose who to call for references. Again, beware of shills.
  • Fraudulent invention promotion firms may promise to register your idea with the U.S. Patent and Trademark Office’s (USPTO) Disclosure Document Program. Although many scam artists charge high fees to do this, you can do it for $10 by filing your document with the USPTO directly. The disclosure is accepted as evidence of the date of conception of the invention, but it doesn’t offer patent protection.
  • Unscrupulous firms often promise that they will exhibit your idea at trade shows, but don’t actually go to these trade shows, much less market your idea effectively. Check with previous clients and trade show sponsors about whether their ideas were exhibited.
  • Many unscrupulous firms agree in their contracts to identify manufacturers by coding your idea with the U.S. Bureau of Standard Industrial Code (SIC). Lists of manufacturers that come from classifying your idea with the SIC usually are of limited value.

Tips Before Moving Forward

Contracting for the services of an invention promotion firm is no different from making many other major purchases. Apply some common sense.

  • Question claims and assurances that your invention will make money. No one can guarantee your invention’s success.
  • Investigate the company before you make any commitment. Call the USPTO at 1-866-767-3848, and the Better Business Bureau, the consumer protection agency, and the Attorney General in your state or city, and in the state or city where the company is headquartered. Under the American Inventors Protection Act of 1999, invention promoters must give you the names and addresses of all invention promotion companies they have been affiliated with over the past 10 years. Use this information to determine whether the company you’re considering doing business with has been subject to complaints or legal action.

If a promoter causes you financial injury by failing to make the required disclosures, by making any false or fraudulent statements or representations, or by omitting any fact, you have the right to sue the promoter and recover the amount of your injury plus costs and attorneys’ fees.

In addition, while the USPTO has no civil authority to bring law enforcement actions against invention promoters, it will accept your complaint and post it online if you complete the form, Complaint Regarding Invention Promoter, at www.uspto.gov/web/forms/2048.pdf.

The USPTO also will forward your complaint to the promoter, and publish its response online. To read complaints and responses, visit Inventor Resources at www.uspto.gov/web/offices/com/iip/index.htm.

TOP TEN

WARNING SIGNS

What to watch for when working with an invention submission company

Slick ads on radio, TV and magazines.

Refusal to respond to your questions in writing signed by a company official.

Salespeople want money right away …up-front.

You are told to describe your idea in writing, mail it to yourself and don’t open the envelope.

You are promised a patent search but no patentability opinion by a patent attorney/agent.

You are guaranteed to get a patent or your money back.

You are advised to apply for a design patent.

You can’t reach salespeople or company officials without leaving many messages.

You are told that your idea is a “sure-fire” hit!

Refusal to provide client references or copies of forms and agreements for your review.

To file a complaint with the Federal Trade Commission, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov/ftc/complaint.htm. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad.

Source: USPTO, FTC

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