The Federal Trade Commission has won a settlement with a marketer of so-called invention promotion services.
As part of the agreement, Michael S. Fleisher is banned from marketing such offerings. In addition, he will dismiss his appeal of an earlier contempt judgment.
The deal also stipulates that Fleisher cannot void his $59 million liability from the contempt action by filing for bankruptcy.
The FTC sued Fleisher in May, alleging that he misrepresented the benefits offered by Patent & Trademark Institute (PTI).
According to the commission, PTI stated that purchase of these services would likely lead to financial gain for the consumer, and that the firm evaluated the potential of consumers’ inventions.
Fleisher and his associates were held in contempt last year for violating a 1998 court order against the company under its former name, International Product Design. All of the defendants except Fleisher were banned from marketing invention promotion services, but he was excluded from the ban because he wasn’t a defendant in the original case, the FTC stated.
Fleisher’s former associates revived the business as PTI, putting them in contempt, the FTC continued.
According to a legal papers filed by the FTC in 2007, PTI invited consumers to submit information on their inventions on the Web site inventorshelpline.com.
Those who did were contacted by a PTI telemarketer, and told that they had passed an initial screening process and were “approved,” the FTC alleged.
The telemarketer then urged the individual to purchase a “Phase 1” assessment for a sum ranging from $895 to $1,295, according to the FTC.
“In addition to making false earnings claims, PTI falsely represented that it assessed the merit, marketability, and patentability of inventions,” the FTC argued.
The order must be approved by the U.S. District court for the Eastern District of Virginia, Alexandria division.
Fleisher’s settlement does not constitute an admission of a law violation, the FTC. The order must be approved by the U.s. District court for the Eastern District of Pennsylvania.
