Why would a company not want to hear about my invention unless it is patent pending?

Many inventors wonder if they can skip all this “patent stuff” and simply approach a company with a raw, unpatented idea in hopes of getting that company interested in using their idea.  Ideally, the company would sign a non-disclosure agreement with the inventor promising to keep the invention secret, hear what the inventor has to say, and then pay the inventor a lot of money for the use of their idea.  That would surely simplify things.

Unfortunately, this scenario almost never occurs in the real world.  Most established companies have a policy of never signing non-disclosure agreements with independent inventors, and of not listening to the ideas of inventors unless those inventors have issued patents or patents pending (filed patent applications).  The reason is actually quite clear when you think about it from the perspective of the company.  Let’s assume that the company is internally developing a new product, a new mouse trap.  Suddenly, an independent inventor comes to the company and tells them he has a great idea for a new product.  The company signs a non-disclosure agreement with that inventor and the inventor then discloses to the company an idea for the same mouse trap that the company already has under development.  If, a year later, the company comes out with the new mouse trap, there is now a high likelihood that the inventor will sue the company for breaching the non-disclosure agreement.  The inventor will assume that the company stole his idea even though, in reality, the company developed the mouse trap in-house.

Clearly, savvy companies will not take the chance of this happening.  You can’t blame them.