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FTC Amends Complaint Against Operators of Invention-Promotion Scheme

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In March 2017, the Federal Trade Commission charged the operators of a patent and invention-promotion scam with deceiving consumers and suppressing complaints about the company by using threats of criminal prosecution.

As previously blogged about here, the FTC stated that “[t]hrough TV ads, telemarketing, and the internet, the Florida-based defendants touted their services as a way for inventors to patent their products and make big money. According to the FTC, in their initial conversation with an inventor, the defendants’ sales people invariably praised the invention and made big promises.

The FTC also alleged that defendants were paid thousands of dollars to patent and market their inventions based on bogus “success stories” and testimonials. Moreover, according to the FTC, the defendants employed unfair tactics to discourage consumers from publishing reviews about the service, including threats of legal action, criminal charges and prison.

A federal court in Miami, Florida, temporarily halted the scheme and froze its assets pending litigation. On June 5, the court extended its temporary restraining order until June 26, 2017.

The Federal Trade Commission has amended its complaint against World Patent Marketing.

The amended complaint alleges that WPM claimed its clients’ products were sold in numerous popular “big box” stores, even though no such inventions are sold in any brick and mortar stores. According to the FTC, WPM also falsely touted licensing deals between inventors and “WPM China” involving WPM’s purported manufacturing plant in China. However, according to the FTC, “WPM China” does not exist, and WPM has no manufacturing plant in China.

The amended complaint further alleges that WPM falsely told consumers that its review team needed to approve their ideas before they could move forward with the company, when in fact no such review occurred.

Contact an FTC defense lawyer if you are the subject of a local, state AG or federal regulatory enforcement investigation or action.

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ADVERTISING MATERIAL. These materials are provided for informational purposes only and are not to be considered legal advice, nor do they create a lawyer-client relationship. No person should act or rely on any information in this article without seeking the advice of an attorney. Information on previous case results does not guarantee a similar future result. Hinch Newman LLP | 40 Wall St., 35th Floor, New York, NY 10005 | (212) 756-8777.

Richard B. Newman is an advertising law and regulatory defense attorney at Hinch Newman LLP focusing on Internet marketing compliance and digital media matters. His practice involves conducting legal compliance reviews of advertising campaigns across all media channels, regularly representing clients in high-profile investigative proceedings and enforcement actions brought by the Federal Trade Commission and state attorneys general throughout the country, advertising and marketing litigation, advising on email and telemarketing best practice protocol implementation, counseling on eCommerce guidelines and promotional marketing programs, and negotiating and drafting legal agreements.

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