Don't use Invention Assistance Companies until you check the PTO

Short Post: 

There are a lot of entities out there that want to help you get your idea off the ground. From venture capital firms, to Kickstarter, to your cousin's Persian rug connection, there are people well placed who want to see your idea succeed and share in the profits.  
There is nothing wrong with bringing a few fellow travelers along with you for the ride. In fact it is good practice to have a couple more heads to put together when the going gets tough. 

One group that does not have your best interest at heart are "Invention Assistance" companies.  You seen the ads on late night T.V. They will help you patent, market, and sell you idea to major companies! 


Why go to a moldy patent attorney who has ethical obligations?  Hitch your wagon to a business that knows what good ideas look like, and will escort you through the process from conception to showers of riches.  </sarcasm>

While it is entirely possible that these companies do help the odd inventor. It is much more likely you will exit the process will poorer, both in terms of actual money and patent rights. 

We could walk through all the way that Invention assistance companies upbraid your future patent having happiness, but the Patent Office has already compiled a list of complaints as depressing as they are informative.   

Here is an excerpt of a complaint sent to the PTO regarding an Invention Assistance Company: 

Name of mass media invention promoter advertised in:  Mail Advertisement

Invention promotion service offered to be performed:  To market and license my invention.

Explanation of complaint between customer and invention promoter: 
I am filing a complaint against this company.  I paid them $25,270.00 completed last payment May 2011.  On November 6, 2012, received a letter they closed their business so I got ripped off.  In year 2007, I lost $5527 – to another companyXXXX., XXXX, XXXX, XX 07004.  That makes it (two) almost $31,000.  How can I trust anyone to market and license my invention.  I don’t’ have the money anymore. I research on the website on the XXXX before paying any money.  Who are the trusted companies who will follow through and assist new inventors?  These companies had a bad reputation with the BBB and FTC.  What am I doing wrong?  What do I look out for?  I need help to get my money back and market my invention.

You can read all the complaints for various Invention assistance Firms, here. 

Patent Lawyers, and law firms in general, will not assist you in taking your idea to market. That is generally a task best left for yourself.  However, if you must use a company to help you, understand what you are getting yourself into. 

More importantly, check the company out, and due your due diligence. It is not enough to review the BBB, but check the PTO, and the FTC. If your idea is worth thousands of dollars, then it is worth the time to make sure you are protecting it right. 

Jordan Garner 

What should be in my site's Privacy Policy?

A client recently contacted me in a panic. They had seen the recent FTC settlement (see here) with Snapchat and were concerned about their own App's privacy policy. We talked through their concerns and determined that their privacy policy was sufficient to cover current usage of their App.

It is important for a Start-up developer to know the purpose of a "Privacy Policy" and its cousin "The Terms of Use."  They are not simply "make work" hassles for lawyers, or something to be copied blindly off of a Git repository. {Ed. Except if it is a Privacy Policy template from www.Baselex.com}.

The purpose of both can be summarized as the contractual obligations of each side, the user and the App provider, that exists when the App is used. {Ed. For our purposes, App covers any minimally interactive website.}

Terms of Use
The Terms of Use are fairly straight forward and mostly deal with the User obligations. In an effective ToU, the App Provider lays out some explanation of the functionality that will be encountered in using the App (such as forums or comments) and a code of conduct that the users agree to be held to when using the App. For example, many apps have a "non-harassment" component to their Terms of Use. Users that violate this, generally find themselves on the wrong side of the "Ban Hammer".  The Terms of Use are similar to an End-User License agreement, and tend to contain similar language. ToS, when effective, provide a User of an App with a clear list behaviors, rights, and obligations (such as honoring Intellectual property) that exist when they use the App.  

Privacy Policy
Privacy Policies differ in significant way from Terms of Use and generally lay out how the App Provider will use the data of the User. The goal of any effective Privacy Policy is to highlight the ways that a User's personal identification and data might  be used by the App Provider. Aggregated stats, geolocation, and preferences for Ad-Targeting are all pieces of data that an App Provider might collect about individual or collective users. There is no explicit rule in the U.S. that limits the data that an App provider can collect to specific categories. (with the exception of various HIPPA relevant issues which are beyond the scope of this brief post.)

What is required is that the App Provider lay what those pieces of information that are being collected. A well drafted Privacy Policy provides enough scope to the App Provider to modify their data collection practices based on market need, while not deceiving or misleading Users as to the scope and extent of the data collected.

Where SnapChat ran afoul of the FTC was in failing to abide by this primary role. The Snapchat Privacy Policy (according to the FTC) provided explicit statements on what data was and what was not collected through the use of the App. Specifically, Snapchat claimed that the communications sent to recipients was ephemeral to the recipient and not stored in any database or server.  Through a series of hacker data breeches, it became clear that not only was this not true (there were vast databases of Snaps retained by Snapchat) but the data was not ephemeral to the recipient. The recipient of a Snap could, through various technological methods, obtain a permanent copy of the snap.

 Furthermore,  the Snapchat privacy policy explicitly disclaimed the storing of geolocation data. Again, after a review of the data stored by Snapchat, it became clear that geolocation data was being stored for future use.

As a result of these revelations, it became clear that the Privacy Policy and Terms of Use for SnapChat's app was woefully deficient and confusing. The natural outcome when consumers feel deceived and confused about the true nature of a product is an investigation by the FTC.

Therefore the first thing to ask when crafting a privacy policy is what does your app or website seek to accomplish, and how does it use the user data in order to accomplish task?  There is no benefit in making a statement about specific functionality and features if these features are not present. Quite the contrary, there is a significant downside to telling App users one story about functionality, while the truth tells another. Likewise, if you need geolocation data, or contact lists, explicitly state that you need them and use them in your privacy policy. It is better to lose a few privacy adherents in the early use stage then have potentially millions of potential plaintiffs in a class action suit based on deception.

As final matter, Privacy Policies should not be drafted and locked in a drawer under the TOS/PP file folder in your server root.  Every iteration of the App, from customer feedback, to posts, to direct messaging might change what type of data you need to collect from your users. Similarly, if you are changing revenue models, you might need to update your privacy policy to indicate the structural change in how you are using the data (from purely analytic, to a data broker model). A quaterly review of both the ToS and PP are a good way to ensure that you are not providing inadvertently misleading information to your Users about the App and their privacy.

Jordan Garner