Stopping The Patent Scams

We as IP lawyers should be more vocal in calling out patent scams, which means reporting abusive practices when we encounter them.

The news that former Attorney General Jeff Sessions had resigned at President Trump’s request was a fitting end to a dizzying post-midterm election news day last week. With the announcement that Matthew Whitaker, a former U.S. Attorney for the Southern District of Iowa and Sessions’s Chief of Staff would be become Acting Attorney General, the race to uncover questionable associations from his past began immediately. Almost instantaneously, reports were circulated about Whitaker’s prior affiliation with a company called World Patent Marketing in 2014 (press release announcing his role here). According to reports, the company paid Whitaker around $10,000 for his service on its advisory board. Of course, things did not end well for World Patent Marketing, which was fined $26 million by the FTC earlier this year, while having its principal barred from any future work offering an “Invention Promotion Service.”

Everyone is free to decide for themselves whether or not Whitaker’s involvement, however limited, with World Patent Marketing should call into his question his fitness as the nation’s chief law enforcement officer. (Joe Patrice offers his views here).  Yet another topic for well-meaning partisans on both sides of our nation’s political divide to argue about for a few days before the news cycle turns to some other controversy demanding immediate attention. In fact, by this writing, most of the news has already turned to other happenings. Either way, whether or not Whitaker’s affiliation with World Patent Marketing should be disqualifying is not the focus of this column.

We would be remiss, however, to pass on the opportunity this story presents to educate the public about the existence of companies preying on uneducated consumers looking for help with their inventions. My partner, Zach Silbersher, offers some good advice for inventors with his take on this story on our Markman Advisors blog. As with all businesses engaged in diseased practices that take advantage of the vulnerable, there is no antiseptic as powerful as media attention to warning future victims off. If the current media attention on World Patent Marketing’s story prevents one more victim of a patent scam, it would be worthwhile.

At bottom, the tale of companies like World Patent Marketing is a miserable one, highlighting the dangers of greed all around. There is no doubt that navigating the world of patent prosecution can be difficult, especially for those whose IP literacy is lacking. The fact that patent attorneys and agents need to pass a separate exam in order to secure registration before the USPTO underscores the complexity of the endeavor. At the same time, the general public’s relative unfamiliarity with the patent process creates a demand –however misplaced — for “help” from outside services that promise results in exchange for immediate cash payment.

In some ways, the desire to procure outside help to assist with patent prosecution efforts is an understandable one. It is the same desire that informs engagement of outside patent counsel, for example. The mistake, however, is in the decision to hire a flashy “full-service” or “patent promotion” outfit that is long on slick marketing that preys on inventors’ dreams of lucrative licensing efforts, but short on actual help with procuring patents of value. Undoubtedly propelled by greed as well are those who would set up and run such a business, they operate in the regrettable tradition of scammers throughout history.

It is unclear whether the restraints on lawyer advertising helps give rise to the market opportunity seized by these inventor-assistance “firms.” What helps them out for sure is their ability to charge lower prices than reputable lawyers and patent agents — since it is easy to charge less when you have little intention of actually doing any work — as well as the marketing reach provided by the Internet. Especially since these types of firms often describe how they can help make the patenting and licensing process “simple.” Anyone who has practiced a minute of patent law understands the absurdity of that claim.

But people fall for pitches of that sort, and hand over their money in exchange for promises to help them commercialize their “inventions.” True, the desire for shortcuts or a quick score suggests that many of these inventors are motivated by a measure of greed of their own. That is a human drive. So is the general tendency of people to not research things that are beyond their ken, especially when someone they can allegedly trust offers to bring a measure of expertise to their side. But even if you want to blame inventor greed or ignorance in some measure, that does not excuse the behavior of patent scam companies that promise a lot but deliver — as in World Patent Marketing’s case — nothing of value to the very customers that place their trust and hard-earned money in their hands.

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Ultimately, all we can do is hope that the sudden notoriety of World Patent Marketing helps discourage companies who are engaging in inventor abuse from continuing their practices. Yes, there are many legitimate companies that offer inventor services in a variety of forms. And that even lawyers are not immune from shirking off their duties to their clients. We could hope, however, that those seeking patent services will educate themselves on what they are paying for. Because any consumer should do what they can to make sure they are getting value for their money. At the same time, for as long as abuse exists, we as IP lawyers should be more vocal in calling out patent (or trademark) scams. Which means reporting abusive practices when we encounter them. And encouraging responsible marketing by IP service providers of all stripes. Finally, we can do our part by raising the level of IP literacy in the general public, while offering special assistance to those who have been victimized by patent scams. Because the cons will continue for as long as we allow them to.

Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.


Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

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