An invention-development firm tries to leave its ties to a troubled invention promoter in the past.
By B. Collins
Richard Donat is here to tell you his company isn’t a leopard that has changed its spots – he says it wasn’t a leopard in the first place.
He used to work for Inventors Publishing & Research or IP&R, the defunct San Francisco-based invention-promotion firm founded in 1995 and notorious for over-promising, under-delivering and generating numerous consumer complaints.
In his year and a half at IP&R, Donat worked in sales and business development and created inventor relationships with retail companies.
He’s now CEO of AbsolutelyNew, a venture-backed, San Francisco-based company formed as a sister company of IP&R in 2003. The company develops, markets, promotes and commercializes inventions for upfront fees.
Donat, pronounced DOE-nay, re-launched the new AbsolutelyNew in 2007. It has about 75 employees, including sales, marketing, engineering and technology people.
“If I catch you lying or overselling,” he tells employees, “I will fire you right there on the spot.
“IP&R was willing to tell all the positive things about being an inventor and getting products to market,” he tells Inventors Digest, “but I don’t know they were always as willing to set the bar and explain the risks.”
AbsolutelyNew boasts a prestigious board of advisors: Myra Hart, retired Harvard Business School professor and founder of Staples; Mark Copman, a vice president at 3M; Ray Brown, a former vice president for Sears and Kmart; Ajit Shah, an entrepreneur and venture capitalist. Also on the list, Patrick Raymond, the executive director of the United Inventors Association.
AbsolutelyNew was among the first companies to become certified under the UIA’s new certification program which launched this year.
AbsolutelyNew posts on its site that, “Inventing a great new product is not easy. Bringing it to market is even more difficult.”
AbsolutelyNew hosts a blog where the public can offer feedback.
And AbsolutelyNew sent Inventors Digest a copy of its inventor contract to review. Other companies have denied this magazine’s request for similar documents in the past.
As of the end of February, AbsolutelyNew had 565 clients with contracts in progress, the document shows. Of 1,638 client contracts completed, 80 clients, or 4.88 percent, obtained licensing agreements.
“This five percent (5%) success rate compares very favorably to the two percent (2%) rate cited on the U.S. Patent and Trademark Web site,” the document states.
Five licensed clients “have already earned more in royalties than they paid for marketing services,” it adds.
The company also is transparent when it comes to inventors retaining their intellectual property and patents. “Nothing contained herein shall be construed as granting (AbsolutelyNew) an ownership interest in the invention or any of the Rights.”
AbsolutelyNew bought “select assets” from IP&R – it cherry-picked the most promising inventions and products for its portfolio. The company posts many of those former IP&R products on its Web site.
Critics, such as inventor and product developer Roger Brown of North Augusta, S.C., cries foul. He was among those who speculated on the motives and credibility of AbsolutelyNew in an online forum.
“If you truly are cleaning the slate and starting over NEW,” Brown wrote in the thread, “shouldn’t you only be promoting what the NEW company has done and provides?”
The drama played on for months and petered out in early February after a company spokesman addressed the concerns. The company’s lengthy responses seemed to have had a calming effect. Most seem to take the posture of “time will tell” or “make sure to read the fine print.”
Some of the old IP&R products had licensing agreements that expired or were with manufacturers that no longer exist. It’s good business for AbsolutelyNew and inventors to wrest potential royalties from those legacy products, Donat explains.
The company has lots of good products, he says. “What’s bad is the perception we’re the same company under a different name.”
He says about 15 percent of the 75 people on the AbsolutelyNew payroll came from IP&R, including chief financial officer Henry Lo, those with technology expertise and a couple of salespeople.
“I only brought on people who were heavily scrutinized,” he says.
Donat may have underestimated the weight of IP&R baggage, left courtesy of IP&R founder and CEO Steven Barbarich.
Barbarich wrote The Complete Manual to Making Money with Your Inventions and Patents, as well as some interesting e-mails. In one to self-appointed inventor industry watchdog Ron Riley, he reportedly said:
“A little more background on myself. I hold [sic] Chairman position at the National Business Advisory Council. I was appointed by the House Majority Leader, Tim Daly. I was also awarded the National Leadership Award 2004 by Congress. As an avid author, like David Pressman, I consult with inventors daily.”
Barbarich evidently meant former House Majority Leader Tom Delay, who resigned after a Texas grand jury indicted him in 2005 on criminal charges that he conspired to violate campaign finance laws.
The Business Advisory Council is a creature of the National Republican Congressional Committee. The phone number for the council routes to a call center, which could not verify Barbarich’s claims.
Barbarich declined to be interviewed for this article. When Inventors Digest asked him about AbsolutelyNew and his role in the inventor industry, he e-mailed: “I have been totally out of that industry and am not involved with that company.”
He’s currently selling hot tubs and outdoor kitchens online.
While IP&R may be dead, complaints linger on the USPTO’s Web site. They generally allege failure to deliver promotional materials and tangible results after spending thousands of dollars. One inventor says IP&R sent him a reminder that maintenance fees were due on his design patent. Design patents are not subject to maintenance fees.
Donat is aware of IP&R’s bad reputation, which he says is deserved. And he’s painfully aware of IP&R’s links – however dated and undeserved – to his company.
Inventors, he notes, are his toughest critics.
“We have to answer that criticism and that’s why we went through the UIA (certification) process,” he says. To not fall into the scam category, “we have to do this cleaner and better than anyone else.”
As he makes his case that his company is not a spot-changing leopard, he seeks to position AbsolutelyNew as a lion in the industry.
He notes that invention-submission companies are “maybe a $20 million business. Does $20 million interest me? Absolutely not.”
Donat cites Sharper Image (where some of AbsolutelyNew’s executives worked), Hammacher Schlemmer, Brookstone and Procter & Gamble as companies he wants to emulate.
“My hope is that this will become a billion-dollar business. The only way to do that,” he adds, “is bring products to the marketplace.”