FOR RELEASE: SEPTEMBER 10, 1991
FTC CHARGES INVENTION PROMOTION COMPANIES
WITH MAKING FALSE AND DECEPTIVE CLAIMS:
SETTLEMENTS PROPOSE $570,000 FOR CONSUMER REDRESS
The Federal Trade Commission has charged that American Idea
Management (AIM) of Stoneham, Massachusetts, an invention
promotion company, its two successor corporations and three
individuals have misrepresented the nature, quality, and success
rate of invention promotion services they have sold to inventors.
Proposed consent decrees to settle the charges would prohibit
future misrepresentations. In addition, the defendants would pay
$570,000 plus interest, to provide partial refunds to consumers
injured by the defendants' allegedly deceptive activities. The
FTC will send refund-claim forms to eligible consumers during the
next several months.
In two separate complaints, filed in different jurisdictions
and accompanied by the proposed consent decrees, the defendants
are: AIM; Idea Management and Patent Assistance Corporation, also
of Stoneham, Massachusetts; Technology Licensing Consultants
Incorporated, of Pittsburgh, Pennsylvania; and corporate officers
or owners: Suzanne Kameese, of Lynnfield, Massachusetts, and
Anita French, and Lowell French, both of Pittsburgh.
- more -
(American Idea Management -- 09/10/91)
Since 1984, according to the FTC complaints, the defendants
have sold a variety of invention promotion services to individual
inventors. The defendants solicit inventors to submit ideas or
products for a free "initial review." They then offer the
inventor -- for a fee ranging from $450 to $595 -- a written
"research report" that often includes a patent novelty search and
a written opinion of patentability prepared by a registered
patent attorney. If the "research report" is favorable, the
defendants then offer marketing, promotion, and licensing
services for an additional fee ranging from $3,500 to $9,750.
The FTC charged that the defendants have made numerous false
representations when selling these services to consumers, and as
a result have caused substantial consumer injury. Among the
false claims, the complaints allege, are representations that:
-- the defendants' clients have realized financial gains
when, in fact, no inventor has earned more money than he or
she paid the defendants for their services;
-- the free "initial review" and "research report" are
honest, competent and objective evaluations of the merit or
marketability of the invention when, in fact, they were not;
-- the defendants perform substantial services to develop or
refine the clients' ideas when, in most instances, they did
not;
-- they have special access to, or have been retained by,
manufacturers seeking new product ideas, though, in fact,
neither claim was true.
The proposed consent decrees, which require the approval of
the courts in which they were filed, would permanently prohibit
the defendants from making the kinds of misrepresentations
alleged in the complaints, and from misrepresenting any material
aspect of their services.
The decrees also require the defendants to disclose to
future clients -- in their initial written communication and in
the client contract -- the number of clients who have earned more
money than they paid for the defendants' services, and all fees
the defendants' charge for these services. The defendants also
must disclose the risks associated with marketing and licensing
new products: specify that the defendants do not evaluate the
marketability of ideas they promote; and inform consumers that
they have seven days to cancel a contract with the defendants.
(Amercian Idea Management -- 09/10/91)
The FTC filed the complaints and proposed consent decrees in
the U.S. District Court for the District of Massachusetts, and in
the U.S. District Court for the Western District of Pennsylvania,
on September 9. This matter was handled by the FTC's Boston
Regional Office.
NOTE: Consent decrees are for settlement purposes only and do
not constitute admission of a law violation. Consent decrees are
subject to court approval and have the force of law when signed
by the judge.
Copies of the complaints and proposed consent decrees will
be available shortly from the FTC's Public Reference Branch, Room
130, 6th Street and Pennsylvania Ave., N.W., Washington, D.C.
20580; 202-326-2222; TTY 1-866-653-4261
# # #
MEDIA CONTACT: Howard Shapiro, Office of Public Affairs,
202-326-2176
STAFF CONTACT: Phoebe Morse, Boston Regional Office,
10 Causeway Street, Rm 1184
Boston, Massachusetts 02222
617-565-7240
(Civil Action Nos: Pittsburgh -- 91-1500)
Boston -- 91-12353K)
(FTC File No. 882 3023)
(aim)