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FTC Cracks Down on Fraudulent Invention-Promotion Firms

The Federal Trade Commission announced at a July 24, 1997 press conference that it has frozen the assets of several invention-promotion companies alleged to have hoodwinked thousands of inventors out of at least $90 million collectively.

The named companies are said to have promised novice inventors marketing support and other services for their ideas and products but then failed to follow through on those promises after receiving payment up front. According to invention industry leaders, legitimate marketing firms typically receive royalties or licensing fees instead of demanding fees prior to providing services.

The crackdown is part of a larger, fraud-busting effort called "Project Mousetrap," which is a multi-agency, federal and state campaign spearheaded by the FTC to identify and charge invention-promotion companies that prey on newcomers to the invention industry.

Robert Lougher, President of the Inventors Awareness Group and one of four noted speakers at the Inventors Voice[tm] Round Table Dinner which took place during the 1997 Invention Convention® trade show in Pasadena, Ca., was quoted in the recent Wall Street Journal article as saying he has noted a "marked increase" in marketing efforts by invention-promotion companies. As more such companies offer their services, it becomes necessary to sort the legitimate from the illegitimate.

According the the Wall Street Journal article, defendants named in the FTC case include: Invention Consultants USA Inc.; Azure Communications; American Invention Associates, Inc of Miami; Concept Network of Indiana, Pa. and Wexford, Pa.; Davison & Associates of Oakmont, Pa. and Indianola, Pa.; Eureka Solutions International Inc. and OEM Communications, both in Monroeville, Pa.

While the FTC has penalized several invention-marketing firms for deceptive practices in the past several years, the July announcement marks the first time that it has identified multiple entities at once.

FTC Press Release
FTC Briefs
FTC-Spotting Sweet-Sounding Promises of Fraudulent Invention Promotion Firms

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