Reinventing InventHelp

‘We Want to Be the Good Guys’

 By Mike Drummond

 

Robert Susa tends to jut his jaw Bill Cowher-like when he ponders.

And as president of invention submission company InventHelp, Susa’s been doing a lot of pondering lately.

Since taking over most of the day-to-day operations from founder Martin Berger a couple of years ago, Susa has been vexed by what he believes is an unfair characterization of the company as a place that rips off inventors.

“Everybody here really cares about inventors,” Susa says. “We want to be the good guys.”

Susa says InventHelp isn’t for every inventor. InventHelp is a turnkey, soup-to-nuts operation for hands-off inventors. It’s for the person who wants someone else to approach potential licensees and put together virtual and other prototypes.

The company says it uses “a variety of methods” to submit an idea or new invention to companies, including mailings, publicity releases, advertising and attendance at trade shows.

InventHelp works with its sister company, Intromark Inc., “in the event substantial interest is expressed by a company in an invention.”

InventHelp does not offer patent services, but does offer what it calls “low-cost patent referrals.”

InventHelp also does not evaluate inventions.

“We simply do not believe that our opinion or anyone else’s opinion of the possible acceptability or market potential of a new product idea or invention is any more than just that – an opinion,” InventHelp’s Web site states. “We cannot make any correlation between that opinion and predictable acceptance by the marketplace. The only opinions that matter are those of companies who may review your invention.”

While that seems pretty straight-forward, few companies in the inventing industry have been as polarizing as InventHelp, the Pittsburgh-based business also known to many as Invention Submission Corp. or ISC.

What’s InventHelp?

 InventHelp is the a trade name of Invention Submission Corp. (ISC), also known as Western Invention Submission Corp. and a division of Technosystems Consolidated. InventHelp hosts the Invention & New Product Exposition or INPEX, the largest inventor tradeshow in the United States.

The typical rap against the company goes something like this:

InventHelp sales reps tell prospective clients their inventions are the greatest things since sliced bread to sell them $800 information proposals. The proposals are based on a template – a mass-production, cookie-cutter binder of boilerplate with the description and image of the invention electronically inserted – and sent to general addresses of targeted companies. And if or when those info packets fail to generate a licensing agreement, InventHelp sales reps urge inventors to buy upgraded services for thousands of dollars.

Susa categorically denies those allegations.

“We don’t evaluate inventions,” he says. “And we give everyone the full price of our services at the first meeting and survey clients to see if they received that information up front.”

As for the accusation that InventHelp offers cookie-cutter invention proposals as a means to snooker inventors with escalating services and fees:

 “We don’t pretend the initial report is all encompassing,” Susa says. “The basic information package is what we think we need to present a product to a company.

“Most patent attorneys use a template. Once you describe an invention, you’re really talking about the market it fits into. That marketing information is something we’ve purchased from government and other sources. The information is about the market, not the invention.

“If you had a baby product, be it a crib or a bib, you’d research the baby market,” he adds. “There will be a sameness to it.”

And as for escalating fees, Susa says InventHelp’s fees “are given to a client at the first meeting. There’s no escalation. I know companies that keep asking for money; that’s not our policy at all.” 

To be sure, InventHelp has had a colorful history, including run-ins with the U.S. Patent and Trademark Office and the Federal Trade Commission.

In 1994, without admitting guilt and with no finding of wrong doing, the company settled allegations with the FTC, which said Invention Submission Corp., “misrepresented the nature, quality and success rate of the promotion services it sold to consumers.”

Under the terms of a consent decree, the company set up a $1.2 million account to pay refunds to customers. InventHelp also says it instituted greater oversight of sales reps, spread out over some 50 offices across the country.

“We have embraced the consent decree and have made it part of our corporate policy and culture,” Susa says. “Every new employee signs a document agreeing to follow the consent decree as a condition of employment.”

The collective conduct of certain invention submission companies compelled the U.S. government to adopt the American Inventors Protection Act of 1999, which requires those invention submission firms to reveal licensing success rates, among other things.

InventHelp has been the target of lawsuits and consumer complaints, some of which are on the USPTO’s Web site. Other Web sites warn inventors to stay away from the company.

This year InventHelp sued and settled an unfair competition case against Gene Quinn and his wife Renee for unflattering posts on Quinn’s influential blog IPWatchdog.com. Although details of the settlement remain confidential, Quinn did remove some posts in which he characterized InventHelp as a scam.

Yet in today’s hyper-connected, information saturated society, is the “scam” label really justified? Can a company that’s been around since 1984 still thrive if it were “scamming” inventors on a daily basis?

Or is there something else afoot? Could it be that would-be inventors are victims of their own exaggerated expectations?

Do the Math

In bold text on its Web site, InventHelp states:

“From 2007-2009, we signed Submission Agreements with 5,336 clients. As a result of our services, 86 clients have received license agreements for their products, and 27 clients have received more money than they paid us for these services.”

That means 0.5 percent of InventHelp clients made money from licensing agreements through InventHelp between 2007 and 2009. That’s double the percentage from years 2003 to 2005.

Let’s put the numbers in context.

Inventions submitted to direct response TV or infomercial companies have success rates of about 0.5 percent, based on interviews Inventors Digest has conducted with Telebrands and Lenfest Media Group, both DRTV companies.

Meanwhile, InventHelp’s rival Davison Inc., also based in Pittsburgh, reports on its Web site that in the last five years:

“The total number of consumers who signed a Contingency Agreement or other licensing representation agreement is fifty thousand ninety eight (50,098). … The total number of consumers in the last five years who made more money in royalties than they paid, in total, under any and all agreements with Davison, is fourteen (14).”

If you do the math for Davison, that’s a 0.027 percent success rate over the last five years.

San Francisco-based invention submission firm AbsolutelyNew does not list licensing success rates on its site. AbsolutelyNew acquired certain assets of former – and notorious – invention submission company IP&R and relaunched under the new name in 2007 (please see our May 2009 article, What’s New about AbsolutelyNew?).

“To the best of my knowledge, we are in compliance with the AIPA requirements,” says AbsolutelyNew vice president of product-development Bill Freund. “I was told that we’re not required to post our stats to our Web site (even though some other companies, like Davison, might be required to do so from federal litigation against them). We share our stats in our first substantive communication with inventors.”

As of February 2009, AbsolutelyNew had 565 clients with contracts in progress, according to a document AbsolutelyNew provided Inventors Digest last year. Of 1,638 client contracts completed, 80 clients, or 4.88 percent, obtained licensing agreements.

Five licensed clients “have already earned more in royalties than they paid for marketing services,” the document adds. Again, doing the math, 0.3 percent had earned more in royalties than they paid in fees to AbsolutelyNew as of early last year.

Freund says the company has launched “a bunch of new products,” so the number of people who’ve made more money than they’ve paid in fees should “increase significantly.”

Quinn, the patent attorney who fought InventHelp and settled this year, says InventHelp’s “numbers are better than I thought they were.”

“If they would double what they’re doing now, how much better could you realistically expect them to do given their take-all-comers business model? I’m not trying to be an InventHelp apologist,” Quinn says. “You have to recognize the past. But to be really fair, you also have to recognize this current trend.

“They’re doing something better or different,” Quinn adds. “What that is, who knows.”

Rehab

In college Susa blew out an elbow en route to a baseball career and later sought to be a fed – a “G” man, a drug enforcement agent or a spook with the FBI. But he says a federal hiring freeze forced him to detour. After a brief stint with Pilsbury, he took at job as a compliance manager with Invention Submission Corp. That was 20 years ago.

“The job title sounded interesting,” he says.

He climbed InventHelp’s ranks. Since assuming a co-leadership role along with founder Berger, Susa has been on a mission to rehab the company’s reputation.

His initiatives included dissecting why potentially promising licensing deals died. In some cases they lacked prototypes. So Susa says he “brought in a guy who’s good at prototyping and virtual prototyping.” InventHelp also obtained services of a Chinese manufacturer that does small-inventory runs.

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The company’s Web site offers multiple cautionary statements about the odds against financial success in the inventing industry. And Susa says if a salesperson misrepresents or otherwise overhypes what InventHelp can deliver, the company investigates. If it’s a first-time offense, the salesperson may have to undergo more training. If it’s a repeat offense, the salesperson may be let go, Susa says.

“We’re learning and getting better as we go along,” Susa says, noting that InventHelp is on pace to eclipse 50 licenses this year, the best ever for the company. “I bring a simplistic view to things. Here’s where we are. Here’s where we want to be. I’m about identifying the roadblocks and eliminating those roadblocks.”

His timing could not have been better. Greater access to information about the invention industry, a recession that has compelled many to pursue inventing and entrepreneurship, downsizing in corporate research and development, and the resulting need for companies to look outside their lairs for new ideas has helped give rise to a gadget renaissance of sorts.

InventHelp, looking to capitalize on these confluent trends, spends hundreds of thousands of dollars a year on television and radio commercials. The company’s ads with the caveman logo are ubiquitous on ESPN and CNN.

Susa dismisses criticism that InventHelp lacks contacts and relationships with company buyers.

“It’s virtually impossible for independent inventors to deal with large companies,” Susa says. “We have 6,000 companies in our data bank and all have signed non-disclosure agreements and have told us what areas of interest they want to see.”

Susa says he personally involves himself in high-level negotiations with major companies that express interest in licensing certain new products from InventHelp clients.

Michael Taub, vice president of marketing and brand development for Ronco, is a corporate ally.

“I’ve found its team to be very sincere, hardworking folks that are very positive to work with,” Taub says.

Quinn, the patent attorney and prolific blogger who arguably has more reason to loathe InventHelp than most others, avers that after years of being seen as the guys in black hats, InventHelp “seems ready to join the polite community.”

He also contends that inventors or would-be inventors should do their homework.     

“It’s amazing to me how many of these inventors who claim to have been rooked don’t have basic Internet skills,” says Quinn, noting that the Internet “is where all the good ‘buyer beware’ information is.

“And they see something on TV or radio, and say, ‘I saw this on ESPN, so this must be legit,’ and that’s probably the sum total of their due diligence.

“The industry,” Quinn adds, “has a population that expects a check to arrive without doing much, if any, work.”

Even a lot of work does not guarantee market success. Susa talks about the efforts his team put behind one inventor’s new type of toothbrush. After a promising start, a major DRTV conducted a market test in the Midwest. The infomercial company paid for filming, the works. And the product “bombed miserably,” Susa admits.

“That’s not a success for us, but we did a phenomenal job getting this product out there,” he says. “It went through the same process blockbuster products go through.”      

At the end of the day, Susa wants the inventing community to believe him when he says InventHelp wants to commercialize products.

“We’re a group of hardworking, experienced people,” he says. “And we’re obsessed with licensing inventions.”   

 The American Inventors Protection Act of 1999

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 (legitimate companies will have a fairly low acceptance rate, usually under 5%);
• its total number of customers;
• how many of those customers received a net financial profit from the promoter’s services (that is, the number of clients who made more money from their invention than they paid to the company); and
• how many of those customers have licensed their inventions due to the promoter’s services

Editor’s note: This article appears in the October 2010 print edition.