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John Mendenhall, who directs the FTC's regional office in Cleveland, said the settlement "will not cover all the injury from the case, but it will be fairly significant.
Davison issued a statement saying it has added risk-disclosure statements to its marketing materials to tell inventors that "new product design is a high-risk venture. Among other things, the article reported: The FTC says the firm still is making misleading statements to customers about its marketing success. The slick sales talk, glossy brochures and professional resumes hide a con game, the federal agency contends.
The firm charges hefty fees for so-called expertise that is actually worthless, the agency claims. Instead, the firm is the one raking in the money, according to the documents. One memo instructed them to tell potential customers: They know us and trust us.
In reality, the firm sends out unsolicited mass mailings touting proposed inventions to companies across the nation. Virtually all the mailings get tossed in the trash, the FTC states in court filings. Update - February 1, Davison's website has an Affirmative Disclosure Statement which lists the following statistics on their operations over the preceding five years current as of January 10, Eureka Solutions International, Inc.
Bender, and sales representative Frank J. See the FTC press release for details. The complaints against Gracy's firm mirrored charges lodged against similar firms in the past.
The invention marketing industry has been a haven for operators who take advantage of gullible consumers. Believing their ideas are the equivalent of winning lottery tickets, consumers pay invention marketing firms thousands of dollars to research and market their ideas. Regulators say most times it's money down the drain. In most cases, the inventors were told their ideas were unique and worth pursuing even though the chances of successfully marketing an invention were "far less than 1 percent," the attorney general's office said.
The ideas included a disposable, milk-saving bra that working mothers could use to store breast milk, a shower caddy that holds shampoo and other toiletries and a switch that automatically turns on a car's headlights when the windshield wipers are in use. The order required the defendants to refrain from making material false representations, "including, but not limited to, falsely representing, directly or by implication: On July , the FTC put out a press release stating: The Federal Trade Commission is mailing more than 17, checks to amateur inventors defrauded by a group of swindlers who falsely promised to evaluate their ideas and help them earn substantial income from their inventions.
See September 6, press release at http: Consumers who receive checks should cash them on or before August 31, Checks are being mailed by the redress administrator. Consumers with questions should call the administrator at The Innovation Center, Inc. The Canadian Innovation Centre has been in the business of helping evaluate new ideas for Canadians for over 20 years, and is not an invention marketing company.
A March 16, , Wall Street Journal article confirmed the settlement and reported that ISC's own disclosure statements revealed that between and , only 8 clients out of 5, made more from their inventions than they paid ISC. The article also reported that in a patent law firm working for ISC required its associates to write a minimum of eight patents a week the norm is more like one to four a month in most law firms, according to the USPTO.
In a press release describing the forthcoming campaign, the PTO noted that the agency's advertisements would feature "an actual inventor, Edward Lewis, who lost several thousand dollars. The advertisements did not accuse any particular promotion company of engaging in scams, nor did they identify the company to which Lewis referred. Lewis with contact information obtained through the PTO and interviewed him. The cable network then published a story in which it disclosed that petitioner, Invention Submission Corporation, was the invention promotion company with which Lewis had dealt.
The story reported that Lewis had filed a complaint against petitioner with the PTO and that petitioner denied Lewis's accusations. The dispute was apparently resolved, and Lewis withdrew his complaint prior to any response by petitioner.
Lewis's complaint was never posted on the PTO's web site. Petitioner alleged that the PTO acted beyond its authority when it publicized Lewis's complaint in its advertisements, and that the PTO had done so in order to penalize petitioner.
Congress itself found, and reported, that "certain invention promotion companies" were engaging in "deceptive practices. Notably, petitioner does not challenge the PTO's authority under the IRA to publicize the prevalence of invention promotion scams generally or the OIIP's services to assist inventors to avoid such scams, including the collection and publication of inventor complaints.
The campaign's use of an actual inventor to dramatize the issue, but without mentioning the particular company with which the inventor had dealt, did not convert the campaign into a "sanction" against petitioner.
The Supreme Court declined to hear the appeal "certiorari denied" in U. It should be noted that these are just consumer complaints, and not adjudications of wrongdoing, so read them and make up your own mind. From , we signed Submission Agreements with 5, clients.
As a result of our services, 86 clients have received license agreements for their products, and 27 clients have received more money than they paid us for these services.
That means that during these years, 0. National Idea Network, Inc. Zarko; FTC Case: In addition, "the company agreed in the future to make important disclosures to potential clients - telling them, for example, how many or, more importantly how few existing clients have made money on use of the services.
The complaint against NISI alleged that the defendants misrepresented the likelihood of financial gain to consumers who purchased their invention promotion services.
The settlement p rohibits the defendants from making false statements about, or failing to disclose, any material aspect of their invention-promotion services. It specifically prohibits the defendants from making misrepresentations about the likelihood that clients will realize financial gain as a result of using NISI's services, or falsely representing that the defendants have successfully assisted customers in marketing their invention or ideas.
In addition, the order prohibits the defendants from misrepresenting that the FTC has endorsed or approved the sales materials or sales practices of the defendants.
The settlement also contains record keeping requirements by the defendants which are designed to assist the FTC in monitoring the defendants' compliance with the order.
The FTC filed the stipulated order in the U. This stipulated order is for settlement purposes only and does not constitute an admission by the defendants of a law violation. Court settlements have the force of law when signed by the judge. Copies of the settlement and other documents associated with "Project Mousetrap," are available from the FTC's web site at http: Customers were asked to make progressively greater payments to UCS after being told the invention appeared to be patentable and marketable.
Unfavorable information about the invention was rarely passed on to the customer, Nixon said. Written requests must be filed by February 3, Granted, for some of them it's a pipe dream. But it's sad," Schierenbeck said. International Product Design, Inc. Inc, Azure Communications Inc.
On January 10th the court placed PTI in receivership, pending the outcome of the case. Stenger has been appointed the temporary receiver. Stenger and his assistant, Sara Kandelac, can be reached at or by email at phil stengerlaw. For more information, see the article on ConsumerAffairs.
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