The Federal Trade Commission (FTC) recently settled civil fraud charges against Scott Cooper and his companies World Patent Marketing, Inc. and Desa Industries that it had brought in March of 2017. Cooper had been charged with operating an invention promotion scam and threatening dissatisfied customers with legal action if they complained. Under the terms of the settlement Cooper is permanently barred from the invention promotion business. In addition, a monetary penalty in the amount of $25,987,192 was ordered, however most of that amount was suspended due to Cooper’s financial condition, however, if Cooper is determined in the future to have hidden assets, the full amount of the judgment will be assessed.
Cooper and his companies promoted their ability to patent and market inventions to would-be inventors. His advertising was filled with testimonials of successful customers, but they were all lies. The truth is that Cooper and his companies would string their customers along for years to extract more and more money from them without providing any substantive services.
Interestingly, as is typical in FTC settlements, Cooper did not admit liability, but admitted to the facts as alleged by the FTC which in plain English is the equivalent of Cooper saying, I didn’t do anything wrong and I promise not to do it again. The FTC often will agree to enter into such settlements as a quick and cost efficient way of stopping a fraud rather than delay resolution through a trial.
The FTC has brought legal actions against numerous invention promotion companies such as Invention Submissions Corporation, which in 1994 was required to pay 1.2 million dollars to cheated customers pursuant to a settlement with the FTC in which, you guessed it, they admitted no liability. So what do you do if you have an invention you want to promote? The first thing you should do is investigate whether or not the company is legitimate with the Better Business Bureau and your state’s Attorney General. Merely because a company may have advertisements on television does not make them legitimate. Generally, there should be little, if any, upfront costs to you. Legitimate companies make their money through royalty sharing agreements with you. In addition, pursuant to the American Inventors Protection Act of 1999, invention promotion companies must provide you with a number of important disclosures, such as how successful their efforts have been on behalf of its customers within the last five years before you sign any contract. For more information about the American Inventors Protection Act and for more of the FTC’s tips on how to evaluate investment promotion companies, click on this link.
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