Invention Promotion Firms Agree to Settle FTC Charges and Pay $250,000 in Consumer Redress

The Federal Trade Commission announced today three settlements entered into with several defendants involved in selling invention promotion services. The settlements resolved a case filed by the agency in July 1997 as part of "Project Mousetrap," a law enforcement sweep that targeted several companies offering invention promotion services.

A redress fund of $250,000 for consumers who purchased fraudulent invention promotion services is included in one of the three separate settlement agreements. Six corporate defendants will contribute to the redress fund. In addition to paying consumer redress, the corporate defendants -- International Product Design, Inc., American Invention Associates, Inc., Invention Consultants, USA, Inc., New Products of America, Inc., Azure Communications, Inc., doing business as London Communications, Inc., and individual defendants Darrell Mormando, Julian Gumpel and Greg Wilson -- are prohibited from falsely representing:

• the likelihood that their invention promotion services will result in financial gain for any customer;
• the defendants’ past success in assisting their customers to market their inventions;
• that the defendants assess or evaluate the market potential, patentability, technical feasibility, or merit of ideas submitted by customers;
• that the defendants make money from royalties generated by defendants’ customers; and
• the amount of royalties received by defendants’ customers.

A second agreement, entered into with individual defendant Peter Doran, contains similar prohibitions against false representations in the sale of invention promotion services.

A third agreement bans defendants Robert Waxman and The Innovation Center, Inc. from selling invention promotion services to the public.

All three settlement agreements contain standard recordkeeping provisions to assist the FTC in monitoring the defendants’ compliance.

The FTC filed the settlements in the U.S. District Court for the Eastern District of Virginia in Alexandria, Virginia, on November 13, 1998. The settlements were approved by the court on November 17, 1998. The Commission vote to approve the settlements for filing was 4-0.

NOTE: These stipulated orders are for settlement purposes only and do not constitute an admission by the defendants of a law violation. Consent settlements have the force of law when signed by the judge.

Copies of the news release and the three settlements are available from the FTC’s web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382- 4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

(FTC File No. X970063)
(Civil Action No. 97-1114-A)