FTC wins injunction against ‘deceptive’ patent marketing company
The Federal Trade Commission (FTC) has succeeded in obtaining an injunction against a US company it alleges is marketing fraudulent patent services.
The US District Court for the Southern District of Florida ordered the injunction prohibiting World Patent Marketing (WPM) from making false claims over the potential for financial gain for customers, and intimidating and making threats to customers registering complaints.
The preliminary injunction, issued on August 16, applies as the FTC continues its attempt to close down the company’s operations. In March, the district court ordered a temporary halt to the scheme.
Established in 2014, WPM advertises services to clients claiming it would assist with patent applications. The company claimed that products invented by previous clients were sold at retail outlets such as Walmart, Target and Home Depot, and that individuals could make “millions and billions of dollars from their inventions”.
Up until January 2017, the company made more than $25 million in gross revenue.
Further, customers who paid $2,000 for an analysis on global invention royalties were told that they were reviewed by academics at Harvard and Massachusetts Institute of Technology (MIT).
But according to the court document, “there is no evidence WPM had any relationships with Harvard, MIT or any other universities”.
Customers who registered complaints were faced with a backlash from the company’s CEO Scott Cooper. One individual, cited in the court documents, approached a board member questioning if WPM was a fraudulent company and received a response from Cooper that “implicitly threatened legal action”.
When another customer requested a refund and contacted the Better Business Bureau, Cooper emailed her to state that her claim amounted to “extortion”.
“The record supports the conclusion that the FTC is likely to succeed on the merits on its deception claim,” wrote Judge Darrin Gayles.
“Defendants’ misrepresentations were deceptive under the FTC act; they were likely to mislead consumers acting reasonably under the circumstances, and they were material to consumers’ decision to purchase defendants’ service,” he added.
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