Invention Promoter Charged with Deceptive Marketing Settles with FTC, Goes Out of Business

An invention promotion marketer has agreed to settle Federal Trade Commission charges that he violated federal law by duping consumers with false promises. The proposed settlement bans him from marketing invention promotion services and requires him to dismiss his appeal of a contempt judgment and stipulate that his $59 million liability from the contempt action cannot be voided through bankruptcy.

The settlement resolves an FTC complaint filed in May 2008, charging Michael S. Fleisher with violating the FTC Act by falsely representing that the purchase of services from the Patent & Trademark Institute (PTI) was likely to result in financial gain for consumers, and that PTI evaluated the market potential, patentability, technical feasibility, and merit of consumers’ ideas.

A 1998 court order barred former associates of Fleisher from misrepresenting their invention promotion services, but they revived their business, formerly called International Product Design Inc., as PTI. In 2007, Fleisher and his associates were found in contempt for violating the order. They were ordered to pay approximately $59 million to the FTC, and all but Fleisher were banned from marketing invention promotion services. Fleisher wasn’t subject to the ban because he wasn’t an original defendant in the case.

The proposed settlement also would bar Fleisher from making misrepresentations about any product or service, such as the likelihood that purchasing goods or services will result in financial gain for any customer; past success in providing goods or services; any aspect of a refund policy or service contract; that the FTC has endorsed, authorized, or approved sales materials or sales practices; or the terms, effect, or purpose of the settlement order. The settlement also contains record keeping provisions to allow the FTC to monitor compliance with its order.

The Commission vote to authorize the staff to file the stipulated final order was 4-0. The
order was filed in the U.S. District Court for the Eastern District of Virginia, Alexandria Division.

NOTE: This stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's Web site provides free information on a variety of consumer topics.

(FTC File No. 0823136)
(Fleisher)