35 U.S.C. § 297 : US Code - Section 297: Improper and deceptive invention promotion

Search 35 U.S.C. § 297 : US Code - Section 297: Improper and deceptive invention promotion

(a) In General. - An invention promoter shall have a duty to
disclose the following information to a customer in writing, prior
to entering into a contract for invention promotion services:
(1) the total number of inventions evaluated by the invention
promoter for commercial potential in the past 5 years, as well as
the number of those inventions that received positive
evaluations, and the number of those inventions that received
negative evaluations;
(2) the total number of customers who have contracted with the
invention promoter in the past 5 years, not including customers
who have purchased trade show services, research, advertising, or
other nonmarketing services from the invention promoter, or who
have defaulted in their payment to the invention promoter;
(3) the total number of customers known by the invention
promoter to have received a net financial profit as a direct
result of the invention promotion services provided by such
invention promoter;
(4) the total number of customers known by the invention
promoter to have received license agreements for their inventions
as a direct result of the invention promotion services provided
by such invention promoter; and
(5) the names and addresses of all previous invention promotion
companies with which the invention promoter or its officers have
collectively or individually been affiliated in the previous 10
years.
(b) Civil Action. - (1) Any customer who enters into a contract
with an invention promoter and who is found by a court to have been
injured by any material false or fraudulent statement or
representation, or any omission of material fact, by that invention
promoter (or any agent, employee, director, officer, partner, or
independent contractor of such invention promoter), or by the
failure of that invention promoter to disclose such information as
required under subsection (a), may recover in a civil action
against the invention promoter (or the officers, directors, or
partners of such invention promoter), in addition to reasonable
costs and attorneys' fees -
(A) the amount of actual damages incurred by the customer; or
(B) at the election of the customer at any time before final
judgment is rendered, statutory damages in a sum of not more than
$5,000, as the court considers just.
(2) Notwithstanding paragraph (1), in a case where the customer
sustains the burden of proof, and the court finds, that the
invention promoter intentionally misrepresented or omitted a
material fact to such customer, or willfully failed to disclose
such information as required under subsection (a), with the purpose
of deceiving that customer, the court may increase damages to not
more than three times the amount awarded, taking into account past
complaints made against the invention promoter that resulted in
regulatory sanctions or other corrective actions based on those
records compiled by the Commissioner of Patents under subsection
(d).
(c) Definitions. - For purposes of this section -
(1) a "contract for invention promotion services" means a
contract by which an invention promoter undertakes invention
promotion services for a customer;
(2) a "customer" is any individual who enters into a contract
with an invention promoter for invention promotion services;
(3) the term "invention promoter" means any person, firm,
partnership, corporation, or other entity who offers to perform
or performs invention promotion services for, or on behalf of, a
customer, and who holds itself out through advertising in any
mass media as providing such services, but does not include -
(A) any department or agency of the Federal Government or of
a State or local government;
(B) any nonprofit, charitable, scientific, or educational
organization, qualified under applicable State law or described
under section 170(b)(1)(A) of the Internal Revenue Code of
1986;
(C) any person or entity involved in the evaluation to
determine commercial potential of, or offering to license or
sell, a utility patent or a previously filed nonprovisional
utility patent application;
(D) any party participating in a transaction involving the
sale of the stock or assets of a business; or
(E) any party who directly engages in the business of retail
sales of products or the distribution of products; and
(4) the term "invention promotion services" means the
procurement or attempted procurement for a customer of a firm,
corporation, or other entity to develop and market products or
services that include the invention of the customer.
(d) Records of Complaints. -
(1) Release of complaints. - The Commissioner of Patents shall
make all complaints received by the Patent and Trademark Office
involving invention promoters publicly available, together with
any response of the invention promoters. The Commissioner of
Patents shall notify the invention promoter of a complaint and
provide a reasonable opportunity to reply prior to making such
complaint publicly available.
(2) Request for complaints. - The Commissioner of Patents may
request complaints relating to invention promotion services from
any Federal or State agency and include such complaints in the
records maintained under paragraph (1), together with any
response of the invention promoters.