(CN) – The Federal Trade Commission sued a Miami-based firm it says stole millions from inventors by selling them bogus patent and marketing services.
In a complaint filed in the federal court in Miami, the agency says that for the past three years Scott Cooper and his company, World Patent Marketing Inc., engaged in an invention promotion scam in which they promised prospective clients lucrative licensing or manufacturing deals that would allow them to profit from their ideas.
World Patent Marketing Inc. which also operates as Desa Industries Inc., says it provides research, patenting and invention-promotion services to national and international consumers.
“Defendants have marketed their purported research, patenting and invention-promotion services through, among other things, advertisements on television and the Internet, telemarketing and correspondence and contracts sent through the United States mail and e-mail,” the FTC says.
The agency says that while World Patent Marketing uses its website to promote the purported success stories of clients, in reality many of those inventors have not enjoyed any success.
According to the complaint, once the consumers contacted World Patent Marketing’s salespeople they were asked to submit written descriptions and drawings of their invention ideas for further review and approval from the company’s “board” or “team.”
World Patent Marketing would then contact the hopeful inventors a few days later to let them know their ideas had been approved, and offer them various packages that range from $7,995 to $64,995 for different levels of patent protection and invention-promotion services, the complaint says.
The government says World Patent Marketing’s sales staff was trained to create a relationship with the clients, and to build up their confidence by praising their ideas and talking about how good their inventions could be to society.
The complaint claims that before having consumers select a package the salespersons tell them that in order to continue the process they need to spend $1,295 for a “global invention royalty analysis” to evaluate the patentability and marketability of the invention.
“Sales people represent that if consumers buy defendants’ invention-promotion services, consumers are likely to realize financial gain by licensing their future patents, or through manufacture, distribution, and sale of their inventions in well-known stores, including Walmart,” the complaint says.
The agency alleges that World Patent Marketing offers clients a “global patent protection,” which is false because all inventors need to pay fees to each country from which they want to receive patent protection.
The Patent Cooperation Treaty also offers inventors the opportunity to apply for patents in multiple countries at the same time.
According to the government, after luring inventors to purchase their services, World Patent Marketing stopped communicating with them, failed to provide many of their promised invention-promotion services, failed to secure the third-party licensing and manufacturing agreements, and even failed to obtain the patents for the inventions.
The agency claims that none of the inventors have made any profit from their inventions nor have they even recovered their investments after agreeing to World Patent Marketing’s fraudulent services.
“In the end, after months or even years of stringing them along, defendants leave most of their customers with nothing,” the FTC says.
The agency also alleges that when consumers threaten to post complaints on the Internet or to file complaints with the Better Business Bureau or law enforcement the company threatens them with filing a lawsuit for extortion, defamation and other causes of action.
“If consumers do complain to the BBB or law enforcement about defendants’ business practices, defendants and their lawyers often make legal threats against the complainants until they retract their complaints,” the FTC says.
Most of World Patent Marketing’s clients “end up in debt, or losing their life savings or inheritances” after investing on its deceptive patent services, the complaint says.
The FTC is seeking a permanent injunction and equitable relief on claims of deception, unfairness and violations of the Federal Trade Commission Act.
It’s represented by the in-house attorney Colleen Robbins in Washington DC.
Representatives of World Patent Marketing Inc. did not respond to emailed and phoned requests for comment on the lawsuit.