From: rdshydur@MIT.EDU
Message-Id: <9402172107.AA12239@carbonara.MIT.EDU>
To: 6901-conference@MIT.EDU
Cc: sem095@MIT.EDU
Subject: wsj article on ftc vs. "invention promotion" outfits;
Date: Thu, 17 Feb 94 16:07:10 EST


to:	all interested parties;

re:	update re successful legal actions by ftc against
	invention promotion outfits, specifically
	invention submission corp, and others under investigation;

from time-to-time i get enquiries about the usefulness and the
legitimacy of marketing companies claiming to be "invention promotion"
and "inventor management" outfits (`outfit' is an old-timer's handle
for any sort of suspect operation, and `operation' is a pretty good
word to describe any kind of enterprise's activities that send up
flags in all but the most naive potential client's minds).

callers to the e-club's hotline (x3-2000), and e-mail appearing in my
inbox, occasionally ask about the very details covered in a recent wall
street journal _enterprise_ column on friday 11 february, page B2, titled:

"Inventor Groups Remain Uneasy Despite FTC Accord: Advocates Vow
to Keep Fighting Exploitation of Amateurs; Firm Signs Pact"

(by Brent Bowers, WSJ Staff Reporter; a few excerpts follow)

The Federal Trade Commission has concluded its legal battle with 
Invention Submission Corp. of Pittsburgh.  But inventor advocates
say the war against marketing companies that allegedly prey on
amateur inventors is far from over.

The FTC announced this week that it had signed a consent decree with
ISC that requires the company to pay $1.2 million into a consumer-
redress fund and to disclose its success rate to prospective clients.
...

"ISC was the big fish of the industry," says Phoebe Morse, director
of the FTC's Boston office.  She says the agreement, which also
applies to two affiliated concerns, their parent company Technosystems
Consolidated Corp., and Martin S. berger, its owner, "should send
warning signals to anybody trying the same tactics."
...

Inventor groups are hailing the settlement as a blow to the biggest
and most visible marketing concern.
...

(side bar)

Selling Ideas - The invention promotion industry at a glance: 

	o   Number of major firms in field:   20
	
	o   Estimated number of customers these firms
	    will enroll this year:	  20,000

	o   Average fee for a total 
	    marketing program:		  $5,700

	o   Estimated total revenues for the firms
	    this year:		    $114 million
...

Legitimate merketing companies do exist.  But they generally
rely on royalties rather than up-front fees, and tend to have
high success rates.

In contrast ... some invention-marketing companies have batting
averages close to zero.
...

The latest statement that Penny Becker, executive director of the
Minnesota Inventors Congress, has seen (from Western Invention
Submissions) states that 7,651 customers who had signed contracts,
"zero have received money in excess of fees paid."

"Who would do business with them after seeing that?" Ms. Becker
wonders, "But people still do.  I can't understand it."
(end of excerpts)

to wrap-up this pointer-to-the-article, i'd like to echo ms. becker's
wonderment, since from time-to-time in the e-club, we hear first-hand
from people (thankfully not alum :-) who apparently keep going back 
to the same outfits for _years_ without success and up until recently, 
evidently without the possibility of effectively challenging the
results of such relationships when at last they've awakened to what's
going on.

and i hope this article is read by numerous people around the institute
who have enquired about certain massachusetts-based outfits who fit 
the profile described in bower's article, changing their operations'
names and soon re-surfacing just a step ahead of discovery and exposure.

					- richard shyduroff
.