PRIA, Government Policy, Made Personal

Summary

Requires invention promoters to give a customer certain facts in writing before signing a contract. The promoter must say how many inventions it reviewed in the last 5 years and how many were judged promising or not, how many customers it had in the last 5 years (not counting people who only bought non-marketing services or who didn't pay), how many customers the promoter knows made a net profit because of its services, how many got license agreements because of its services, and the names and addresses of any invention-promotion companies the promoter or its officers worked with in the last 10 years. If a customer is harmed by a big lie, fraud, or by missing any of the required information, the customer can sue. A court can order the promoter to pay actual money lost or, if the customer chooses before final judgment, up to $5,000 in fixed damages, plus legal costs and lawyer fees. If the promoter knowingly lied or hid facts to trick the customer, the court can raise the award up to three times the amount, taking into account past complaints and penalties. The Patent Office must keep and publish complaints about promoters, let promoters respond, and may collect complaints from other government agencies. Definitions cover what is meant by a customer, promoter, contract, and the services involved, and list a few kinds of organizations that are not covered.

Title 35, §297

Patents, Source: USLM XML via OLRC

(a)In General.—

An invention promoter shall have a duty to disclose the following information to a customer in writing, prior to entering into a contract for invention promotion services:

(1)the total number of inventions evaluated by the invention promoter for commercial potential in the past 5 years, as well as the number of those inventions that received positive evaluations, and the number of those inventions that received negative evaluations;

(2)the total number of customers who have contracted with the invention promoter in the past 5 years, not including customers who have purchased trade show services, research, advertising, or other nonmarketing services from the invention promoter, or who have defaulted in their payment to the invention promoter;

(3)the total number of customers known by the invention promoter to have received a net financial profit as a direct result of the invention promotion services provided by such invention promoter;

(4)the total number of customers known by the invention promoter to have received license agreements for their inventions as a direct result of the invention promotion services provided by such invention promoter; and

(5)the names and addresses of all previous invention promotion companies with which the invention promoter or its officers have collectively or individually been affiliated in the previous 10 years.

(b)Civil Action.—

(1)Any customer who enters into a contract with an invention promoter and who is found by a court to have been injured by any material false or fraudulent statement or representation, or any omission of material fact, by that invention promoter (or any agent, employee, director, officer, partner, or independent contractor of such invention promoter), or by the failure of that invention promoter to disclose such information as required under subsection (a), may recover in a civil action against the invention promoter (or the officers, directors, or partners of such invention promoter), in addition to reasonable costs and attorneys’ fees—

(A)the amount of actual damages incurred by the customer; or

(B)at the election of the customer at any time before final judgment is rendered, statutory damages in a sum of not more than $5,000, as the court considers just.

(2)Notwithstanding paragraph (1), in a case where the customer sustains the burden of proof, and the court finds, that the invention promoter intentionally misrepresented or omitted a material fact to such customer, or willfully failed to disclose such information as required under subsection (a), with the purpose of deceiving that customer, the court may increase damages to not more than three times the amount awarded, taking into account past complaints made against the invention promoter that resulted in regulatory sanctions or other corrective actions based on those records compiled by the Commissioner of Patents under subsection (d).

(c)Definitions.—

For purposes of this section

(1)

(2)a “customer” is any individual who enters into a contract with an invention promoter for invention promotion services;

(3)the term “invention promoter” means any person, firm, partnership, corporation, or other entity who offers to perform or performs invention promotion services for, or on behalf of, a customer, and who holds itself out through advertising in any mass media as providing such services, but does not include—

(A)any department or agency of the Federal Government or of a State or local government;

(B)any nonprofit, charitable, scientific, or educational organization, qualified under applicable State law or described under section 170(b)(1)(A) of the Internal Revenue Code of 1986;

(C)any person or entity involved in the evaluation to determine commercial potential of, or offering to license or sell, a utility patent or a previously filed nonprovisional utility patent application;

(D)any party participating in a transaction involving the sale of the stock or assets of a business; or

(E)any party who directly engages in the business of retail sales of products or the distribution of products; and

(4)the term “invention promotion services” means the procurement or attempted procurement for a customer of a firm, corporation, or other entity to develop and market products or services that include the invention of the customer.

(d)Records of Complaints.—

(1)Release of complaints.—

The Commissioner of Patents shall make all complaints received by the Patent and Trademark Office involving invention promoters publicly available, together with any response of the invention promoters. The Commissioner of Patents shall notify the invention promoter of a complaint and provide a reasonable opportunity to reply prior to making such complaint publicly available.

(2)Request for complaints.—

The Commissioner of Patents may request complaints relating to invention promotion services from any Federal or State agency and include such complaints in the records maintained under paragraph (1), together with any response of the invention promoters.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 170(b)(1)(A) of the Internal Revenue Code of 1986, referred to in subsec. (c)(3)(B), is classified to section 170(b)(1)(A) of Title 26, Internal Revenue Code.

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 106–113, div. B, § 1000(a)(9) [title IV, subtitle A, § 4103], Nov. 29, 1999, 113 Stat. 1536, 1501A–554, provided that: “This subtitle [enacting this section and provisions set out as a note under section 1 of this title] and the

Amendments

made by this subtitle shall take effect 60 days after the date of the enactment of this Act [Nov. 29, 1999].”

§297 Improper and Deceptive Invention Promotion