Patent issue, shrude businessman or an ass?

Opinion / question: I am a highly creative design engineer with 20 years experience, I do consulting work. A potential new client approaches me to help him with an invention, a fairly simple air powered tool. He supposedly had an investor that is willing to pay for the work needed to convert this idea to a product in production. I tell him for a truly production ready design the cost would be around ,000, that would be a turnkey package all contacts, suppliers, analyses, prints, and suppliers needed to simply make a few calls and start making his product. For the moment he just wanted enough design work and prints needed for the patent search and application. OK so I quoted ,500 for that. I also while he was still sitting in my office did a quick patent search for him, no problem finding many patents very much like his idea. He still did not hesitate at that cost, it is very reasonable cost for what needed to be done. I was excited because it is a very good idea, more on that later. He gave me 3 sketches of what he thought this tool should LOOK like and DO, no details at all as how it can be done mechanically, he has very limited skills and mechanical understanding. So I did a lot more patent searching, turns out there were lots and lots of patents, very similar devices from many many years back, nothing new about what he had purposed at all. I also found that products almost identical were already on the market! He can go buy one tomorrow if he wants. I also learned that his investor is broke and not really able to begin to pay for the true cost of what it takes to put a product on the market, they owe money to other people that have helped them on this very product. I inquired about what my client thought this idea he had was worth, what was his plan. He thinks he can build a few prototypes and take it to a tool company and sell it for a million dollars. Last meeting the client was trying to make a deal, could I do the work for 0. I have not seen a cent nor asked for it yet, I have not delivered any information other than the research about existing products and patents. Mean while in my excitement I have already done a truly unique ingenuous cost effective design, it is far different from anything else, it is a patentable design, it would make a very marketable tool.

Finely to the question. I want to take this product over, finance it myself, patent it myself, what if any obligation do I have legally or ethically to these guys. I see it like this.

"I have this great idea, let’s make a car that does not use fuel and hire John to design it for us, we will even give him a small percentage of the patent on this great idea." They draw a picture of a car, make a box where the engine goes and label it "Engine that uses no fuel"

Am I being a shrude businessman or an ass or both?

Technorati Tags: creative design, design engineer, invention, investor, million dollars, money, patent search, patents, prints, prototypes, sketches, tool company, turnkey package