FTC Launches Crackdown on Phony Patent Operations

Thousands of hopeful inventors are losing millions of dollars in a “massive fraud” by scam artists touting phony promises to help patent and market new inventions, the Federal Trade Commission said Wednesday.

The federal consumer protection agency, along with several state attorneys general, announced a crackdown on fraudulent schemes, warning consumers that almost nobody has made a penny by paying an invention-promotion firm.

“These firms profit while the dreams of their customers die,” said Jodie Bernstein, director of the FTC’s Bureau of Consumer Protection. “Virtually no consumers have even made back their investment, let alone any profit, from these companies’ services.”

Announcing a push called “Project Mousetrap,” the FTC said it had recently filed charges in five cases against current or past invention promoters who have operated in the Washington area, Pennsylvania and Florida.

Defendants in those cases, the FTC said, had collected more than $90 million in fees from thousands of consumers, most of whom got little or nothing of value in return.

Fraudulent invention promoters, the FTC said, commonly promise to provide a free evaluation of a new idea, which almost always produces a recommendation that a would-be product has solid promise. Inventors then are lured into paying fees of as much as $10,000 for help in patenting an idea or marketing it to manufacturers, the FTC said.

The FTC released new consumer education brochures, developed in cooperation with the patent office.