A company that advertised it would analyze, file and promote inventions was the subject of a temporary restraining order thanks to a new Federal Trade Commission action filed in Florida federal court.
According to the agency, Scott Cooper and his companies, World Patent Marketing and Desa Industries Inc., deceived consumers with fake "success stories" and testimonials to induce them to pay thousands of dollars to patent and market their inventions. Potential customers were told they would need to purchase a "Global Invention Royalty Analysis" that the defendants claimed contained expert evaluations of the patentability and marketability of the invention, with a price tag of up to $1,295.
Once the analysis arrived, consumers faced another bill, the FTC alleged: this time for packages ranging from $7,995 to almost $65,000 for various services that would help them to earn money from their inventions and see their product sold at big-name retailers.
But after paying thousands of dollars for the defendants' services, consumers were strung along for months, even years, with many seeing nothing in return, the agency said. Those that did receive some marketing assistance received "low-effort, low-value" help, such as domain registrations, press releases, or logos. The defendants generally failed to obtain patents for consumers, secure licensing deals or royalty income, and did not even market the inventions featured in the website testimonials.
The defendants also used unfair tactics—including threats of criminal prosecution—to discourage consumers from publishing negative reviews of the company, the FTC said. One consumer who sought a refund and filed a complaint with the Better Business Bureau received a threatening letter from the defendants' lawyer, stating that seeking a refund was extortion under Florida law and, "since you used email to make your threats, you would be subject to a federal extortion charge, which carries a term of imprisonment of up to two years and potential criminal fines."
The defendants filed at least one lawsuit to suppress consumer complaints, the FTC told the court, and used other threatening tactics that included a gag clause in its consumer contracts and a link that sent existing customers to a company blog post that claimed a consumer who visited the defendants' office was kicked out by the company's "intimidating security team, all ex-Israeli special ops and trained in Krav Maga, one of the most deadly of the martial arts."
A U.S. District Court Judge granted the agency's motion to halt the defendants' operations and freeze its assets pending litigation, in which the FTC seeks a permanent injunction against the allegedly illegal practices and the return of consumers' money.
To read the complaint and the TRO in FTC v. World Patent Marketing, Inc., click here.
Why it matters: "This case is about protecting innovators, the engine of a thriving economy," acting chair of the FTC, Maureen K. Ohlhausen said in a statement about the case. "The defendants promised to promote people's inventions and took thousands of dollars, but provided almost no service in return. Then they added insult to injury by threatening people who complained." The agency also reminded businesses that representations about patentability, marketability, or potential earnings are subject to the FTC's truth-in-advertising standards.