Invention Promoters Will Pay $10 Million to Settle FTC Charges

The owners of an invention promotion operation have agreed to pay $10 million in consumer redress to settle Federal Trade Commission charges that they deceived consumers across the country. The settlement includes a cash payment of $6.9 million, plus other property valued at $3.1 million. According to the FTC, the defendants charged up to $12,000 to evaluate and promote consumers' inventions. The defendants enticed consumers with false claims about their selectivity in choosing products to promote, their track record in turning inventions into profitable products, and their relationships with manufacturers. They also deceptively claimed that their income came from sharing royalties with inventors, rather than from the fees consumers paid.

Under the proposed settlement, in connection with providing research, patent, marketing, and/or invention promotion services, the defendants cannot misrepresent that they're selective in accepting inventors, and that they have a stake in an invention because they "work for free" and/or receive significant income from royalties. They also can't misrepresent how many consumers have contracted with them, how many of those consumers realized a net profit, or how many product licenses they obtained for consumers.

The settlement also bans the defendants from misrepresenting that they've helped inventions become products without disclosing whether consumers have profited from the product, and that they have a vast network of corporations with which they regularly negotiate licensing agreements. They also can't misrepresent that their services are necessary for consumers to license their ideas, and that they prepare objective and expert analyses of the marketability or patentability of ideas.

The defendants are Davison Design and Development, Inc., formerly known as Davison & Associates, Inc., and its principal, George M. Davison III; Manufacturer's Support Services, Inc. and its principal, Gordon M. Davison, and his wife, Barbra M. Davison; and relief defendant Barbara L. Davison, who is George M. Davison's wife. The settlement ends the litigation between the FTC and the defendants.