World Patent Marketing

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World Patent Marketing
Private
IndustryInvention promotion firm
FateShut down by the Federal Trade Commission
Founded2014 (2014)
FounderScott J. Cooper
Defunct2017 (2017)
Headquarters,
United States

World Patent Marketing (WPM) was a fraudulent invention promotion firm based in Florida that deceived inventors into thinking that the company had successfully commercialized other inventions.[1][2] The company was established in 2014 by Scott J. Cooper and shut down by the Federal Trade Commission in 2017.[2] During its three years of operation, it bilked thousands of consumers out of millions of dollars.

Business model[edit]

The company's business model was to lure in would-be inventors. Potential customers learned of the company through television or internet advertisements. Those who visited the World Patent Marketing website would find a listing of WPM’s Advisory Board and a series of misrepresentations including success stories, testimonials, and major retailers in which customers’ products were sold. Retailers included various nationwide online and/or retail giants including: AutoZone, Bed Bath & Beyond, Best Buy, The Home Depot, HSN, Lowe's, PetSmart, QVC, Sears, SkyMall, Staples, Target, Toys "R" Us and Walgreens, as well as "World Patent Marketing Shop".[3] On its Facebook page, in December 2015, it posted that "Mattell partners with World Patent Marketing to Retail Latest Toy Inventions".[4]

The company boasted, in a Jan. 1, 2015 news release for the launch of New York Inventor Exchange (NYIE), of being "the only patent assistance company in history to be awarded a five star review rating from Consumer Affairs, Google, Trustpilot, Shopper Approved, Customer Lobby and ResellerRatings.com.[5] They claimed to have an "A" rating from the Better Business Bureau.[6][7] On its website, the firm linked to positive reviews from sites all offering remarkably high satisfaction ratings of the service (consumeraffairs.com, CustomerLobby.com and TrustPilot.com), albeit with just a few negative reviews.

WPM billed itself as a champion of military veterans, offered them military discounts, and made special efforts to outreach to veterans in its marketing.[8][9] World Patent Marketing would charge its inventor clients up to $400,000[1] for marketing and development assistance for helping them with their inventions, ignored them once they paid their fees, and responded to complaints with threats and intimidation.[10]

Following a criminal investigation, in May 2017 the Federal Trade Commission (FTC) issued a preliminary report in which they outlined the company's method of operation. According to the FTC, when potential customers submitted their proposed product ideas they were first told that World Patent Marketing’s “review team” was researching the proposal because “the company is so selective with the ideas they choose to work with.” They told potential customers that their review included a “Global Invention Royalty Analysis” containing a marketability study created by a “Harvard University & MIT Research Team." Shortly thereafter the company contacted the customer with a sales script saying:

We had our final meeting with the Review Team regarding your idea. And basically from all the research that’s been done on [your idea], the research tells us there’s definitely potential to patent your idea. Because of that, I have the green light from the company to let you know that WPM wants to be a part of your new product idea and help you to protect it and bring it to the commercial marketplace. So, first of all congratulations! . . . The company loved your idea! They think it has a lot of potential. Especially the Sr. Product Director, who is in charge of which ideas are considered for the upcoming trade show. He sees some good opportunities ahead.

However, the FTC concluded that the company had no Review Team and no association with Harvard or MIT, nor had it appeared to ever turn down an idea for a new product.[11]

Several of the more unusual inventions and partnerships that World Patent Marketing listed in their press releases included the "Masculine Toilet" for unusually well-endowed males,[12] a partnership arrangement with "World-renowned physicist, author, and scholar Dr. Ronald Mallett [who] believes time travel is possible, perhaps within the next decade,"[13] and a website that claims that “DNA evidence collected in 2013 proves that Bigfoot does exist,” which sells Bigfoot items such as stuffed animals. The company also planned a celebrity event called “You Have Been Squatched!”[14][15]

Suppression of complaints[edit]

According to the FTC, World Patent Marketing used threats of criminal prosecution and intimidation to discourage and suppress complaints. A review of emails done by Forbes featured an example of a woman who had filed a complaint with the Better Business Bureau after she had been unsuccessful in her attempts to negotiate a refund. She then received an email from a company lawyer telling her that seeking a refund constituted extortion and “since you used email to make your threats, you would be subject to a federal extortion charge, which carries a term of imprisonment of up to two years and potential criminal fines. See 18 U.S.C. § 875(d).”[16]

Another dissatisfied customer who filed a complaint with the Better Business Bureau when he was unable to find a satisfactory agreement received an email from the firm's advisory board member Matthew Whitaker in which Whitaker claimed that the customer's actions appeared to be an attempt at possible blackmail or extortion and there could be "serious civil and criminal consequences" for filing a complaint. Claiming that he, too, was an attorney, the customer wrote back: “Stop with your bullshit emails...You are party to a scam...You will be exposed. I hope I make myself clear, Mr. Whitaker.”[16]

The FTC reported that World Patent Marketing also attempted to frighten their customers by sending them emails describing a company security team of "all ex-Israeli Special Ops and trained in Krav Maga, one of the most deadly of the martial arts...The World Patent Marketing Security Team are the kind of guys who are trained to knockout first and ask questions later."[16]

In their 2017 report the FTC included an example of emails that the company used to prevent or retract complaints:

Hey Genius [ ] I understand you emailed one of my board members telling her you think my company lacks integrity and you think we might be a fraud. Just wanted to let you know that is probably going to be the most expensive email you ever sent. I hope it was worth it . . . meet my attorneys Eric Creizman and Andrew Levi [ ] they really enjoy meeting new people.[17]

In early 2015, when posts critical of WPMI appeared on Ripoff Report, a consumer complaint company's website, Whitaker phoned the operator of the website and, using vulgar language, threatened to sue the owner and ruin his business for allowing "false" reports, even threatening the owner with Department of Homeland Security intervention.[18][19]

Advisory board[edit]

According to the FTC and journalists who have read the email exchanges between the company and its customers, the company relied heavily on the influence of its board members to both attract customers and threaten them. In an April 2016 email Scott Cooper replied to an angry customer, "Do you think all these powerful and influential people would join forces with me if what you said were true? We have former US Attorneys, members of President Obama's advisory council, military generals, famous doctors. Think about it." Promotion scripts used by company representatives also instructed them to boast about the company's "incredible advisory board" and mention Matt Whitaker by name.[20] Whitaker was also used in broader marketing; on November 2014, Cooper, the CEO, wrote an email to a brand building company with the subject line, "Let's build a Wikipedia page and use Whitaker to make it credible."[21]

Members of the advisory board included Matthew Whitaker, who later became the 2018 acting United States Attorney General, Republican Congressman Brian Mast, the scientist Ronald Mallett,[20] Omar Rivero, founder of Occupy Democrats, Moti Horenstein, Nitzan Nuriel, Dell L. Dailey, Christopher R. Seaver, Richard Sulaka, Jr.[22][23] and New York attorney Eric M. Creizman.

Matthew Whitaker was named to the advisory board of World Patent Marketing in 2014. He also appeared in promotional materials and assisted in emailing threats to disgruntled customers.[20] Two months into his association with the firm, Whitaker said in promotional material, “As a former US Attorney, I would only align myself with a first class organization. World Patent Marketing goes beyond making statements about doing business 'ethically' and translates those words into action."[24] Following the shut down the other advisory board members returned fees they had received, however according to news reports, Whitaker did not respond to a request for fees to be returned.[25]

Omar Rivero, founder of Occupy Democrats,[26][27] joined the firm in February 2015. In a news release Rivero stated he hoped to assist Cooper "to rid our country of the patent troll scam [which is] forcing startups to shut down and they are putting a stranglehold on the American Dream."[7]

Richard Sulaka II, a public worker from Warren, Michigan, was also hired in February 2015. Praising Sulaka's "work ethic and professional pride deeply rooted in meeting the exacting needs of the automotive and defense industries," the firm presented him with their "American Dream Award." Sulaka accepted the award saying, "The spirit of American ingenuity and the belief in hard work beats in the heart of every Warren resident, and I'm proud to accept this award on their behalf."[28]

Attorney Eric M. Creizman joined the firm in October 2015. He was advertised as one of the top ten lawyers in New York and "a trained legal assassin," who had authored many publications that exposed white collar and federal crimes. Creizman accepted his advisory position with the firm saying, "I am delighted and honored to join the World Patent Marketing Advisory Board. It's an honor to be affiliated with Scott Cooper – he is a visionary and a philanthropist working hard to push innovations that can make a real difference in people's lives."[29]

In August 2015, the firm hired Moti Horenstein as Director of Security Risk Management with a mission "to update and modernize security at the World Patent Marketing Headquarters in Miami Beach and in their offices worldwide." Horenstein is a well-known martial arts fighter and instructor. He is considered an expert in Krav Maga, a discipline developed in Israel.[30]

In July 2015, the company announced that they had brought in Christopher R. Seaver, a Florida surgeon who specializes in robotics, "to head up our Medical Advisory Board." Claiming to "dominate the fields of medical patents and prototypes," they said they planned to "maintain [their] competitive edge by forming alliances with the most brilliant minds on the planet.” The release quoted Seaver: “World Patent Marketing is an exciting company whose ideas and innovations are cutting edge. Combining technology, customer service and street smarts, World Patent Marketing is leading the industry into a very bright future."[31]

The Advisory Board included two military terrorism experts. In April 2016, World Patent Marketing announced "Ambassador-at-Large for the United States Counter-Terrorism effort, Dell Dailey, has joined the World Patent Marketing Advisory Board." Dailey commented, "The work that World Patent Marketing and The Cooper Idea Foundation does in developing countries is inspiring and is a true model of corporate social responsibility.” Existing board member Israeli Defense Forces General Nitzan Nuriel, who joined the company in 2015, welcomed the new addition to the board saying, “Safety and security are the most challenging issues of our day. Winning the war against terror requires integrity and advanced technology. At World Patent Marketing we are committed to making the world safer, more secure and more prosperous.”[32]

In 2017, former advisory board member Brian Mast made a statement to court that he was appointed to the advisory board without his consent.[8]

Another board member, Aileen M. Marty, a professor of infectious disease at Florida International University in Miami, said she had been told that she would be sent patent ideas to review. She never received any and returned the check she had received when she heard the company might be committing fraud. She commented, “I wish I had never heard of the company and I wish that my name were not in any way associated with it. I can’t turn back time and not accept the offer to be on their board — believe me if I could, I would."[24]

Shut down[edit]

In April 2016 when an irate customer, Crystal Carlson, received a threatening email from Cooper she searched Facebook and found dozens of other inventors who had also been scammed. Most notably she tracked down the inventor of "Teddy's Ballie Bumpers," which World Patent Marketers were using as a star success story, saying that the inventor had seen sales "skyrocket". However, the inventor told Carlson that the Patent Office had rejected his application and he was left with thousands of bumpers stored in a warehouse, selling only 15. Carlson organized victims and they filed a class-action lawsuit in December 2016 alleging deception, fraud, and violations of the American Inventors Protection Act's disclosure rules. Cooper's firm claimed to not be bound by the American Inventors Protection Act and accused the claimants of blaming the company for the failure of their invention ideas. However, by 2017 negative comments from other customers began to pour in online.[1]

In January 2017, an undercover FTC investigator contacted the firm with his idea for an invention, a recipe. As usual, a salesperson responded he "had a great idea with lasting power" and "should expect a revenue stream for decades" even though recipes are almost impossible to patent.[1]

The company was shut down by the FTC in March 2017. According to the FTC, "consumers paid Scott Cooper and his companies, World Patent Marketing Inc. and Desa Industries Inc., thousands of dollars to patent and market their inventions based on bogus 'success stories' and testimonials promoted by the defendants. But after they strung consumers along for months or even years, the defendants did not deliver what they promised. Instead, many customers ended up in debt or lost their life savings with nothing to show for it."[10][33]

In 2018 Cooper was banned from running businesses that promote inventions. Inventors invested a total of $26 million with the company, of which the FTC had only located $2 million by May 2018.[2] Cooper denied wrongdoing but was ordered to pay $1m as well as the proceedings from selling his $3.5m mansion in Miami.[8] According to a November 9 news release by The Wall Street Journal, there is an ongoing criminal investigation by the U.S. Postal Inspection Service and the FBI's Miami office.[25]

See also[edit]

References[edit]

  1. ^ a b c d Shammas, Brittany (22 August 2017). "A Miami Beach Scam Took Millions of Dollars From Thousands of Inventors, Feds Say UPDATED". Miami New Times. Retrieved 7 November 2018.
  2. ^ a b c Moreno, Peter (18 May 2018). "Fraudulent Marketers Banned from Invention Promotion Business – USA Herald". USA Herald. Retrieved 7 November 2018.
  3. ^ "Patent Marketing | World Patent Marketing". 2015-08-31. Archived from the original on 2015-08-31. Retrieved 2018-11-13.
  4. ^ "World Patent Marketing". www.facebook.com. Retrieved 2018-11-13.
  5. ^ "World Patent Marketing Goes Public on New Year's with Plans to Open the New York Inventor Exchange (NYIE)". PRWeb. Retrieved 2018-11-13.
  6. ^ "World Patent Marketing". Better Business Bureau. Retrieved November 12, 2018.
  7. ^ a b "Omar Rivero, Founder of Occupy Democrats and Outspoken Opponent of Patent Troll Scams, Joins World Patent Marketing Board of Advisors". World Patent Marketing. Retrieved November 12, 2018.
  8. ^ a b c Swaine, Jon. "Trump's acting attorney general involved in firm that scammed veterans out of life savings". The Guardian. Retrieved 10 November 2018.
  9. ^ News, Staff (12 November 2018). "FBI Probing "Scam Company" Where Acting AG Matt Whitaker Once Served". Democracy Now. Retrieved 12 November 2018.
  10. ^ a b "FTC Settlement Will Ban Fraudulent Marketers from Invention Promotion Business World Patent Marketing allegedly bilked millions from consumers and suppressed criticism". Federal Trade Commission. Retrieved 10 November 2018.
  11. ^ "UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA" (PDF). Federal Trade Commission. Retrieved November 16, 2018.
  12. ^ "Inventvillage.com announces the marketing launch of the MASCULINE TOILET". PRLOG. Retrieved November 16, 2018.
  13. ^ "Time Travel X: Dr. Ronald Mallett and World Patent Marketing Partner To Make Time Travel A Reality". VIMEO. Retrieved November 16, 2018.
  14. ^ "Matthew Whitaker is steeped in time travel and Bigfoot. He's the right man for the job". The Washington Post. Retrieved November 16, 2018.
  15. ^ "Bigfoot Evidence: World Patent Marketing CEO Scott Cooper Offers $1 Million Reward For Proof". SOUNDCLOUD. Retrieved November 16, 2018.
  16. ^ a b c Hembree, Diana. "'Scam' Company Advised By Matthew Whitaker Threatened Victims, But Hundreds Filed Complaints Anyway". Forbes. Retrieved November 14, 2018.
  17. ^ "UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA" (PDF). Federal Trade Commission. Retrieved November 16, 2018.
  18. ^ "'He was yelling': Whitaker pushed back against early fraud complaints about company he advised". Washington Post. 2018-11-14. Retrieved 2018-11-16.
  19. ^ "Whitaker said to angrily demand website remove posts about patent firm". Wall Street Journal. 2018-11-15. Retrieved 2018-11-16.
  20. ^ a b c Shammas, Brittany (7 November 2018). "Trump's Acting Attorney General Was Part of Miami-Based Invention Scam Company". Miami New Times. Retrieved 7 November 2018.
  21. ^ Ferrel, Greg; Martin, Andrew; Voreacos, David (1 December 2018). "FTC Emails Show Whitaker Fielded Gripes on Miami Firm". Bloomberg. Retrieved 1 December 2018.
  22. ^ "Inventions Advisory Board". World Patent Marketing. 1 September 2015. Archived from the original on 2015-09-01. Retrieved 2015-09-10.
  23. ^ "World Patent Marketing, Board Members and Advisors". Crunchbase. Crunchbase Inc. Retrieved 10 November 2018.
  24. ^ a b "Before he led the Justice Department, Matthew G. Whitaker promoted company accused of deceiving clients". The Washington Post. Retrieved November 14, 2018.
  25. ^ a b Wang, Christine. "FBI reportedly investigating company where Trump's acting attorney general was an advisory board member". CNBC. Retrieved November 13, 2018.
  26. ^ "Omar Rivero". Crunchbase. Crunchbase Inc. Retrieved 10 November 2018.
  27. ^ Butcher, Becky (24 February 2015). "Omar Rivero joins World Patent Marketing board". IPPro The Internet. Retrieved 10 November 2018.
  28. ^ "Richard Sulaka, Jr., Macomb County Deputy Commissioner, is Appointed to the World Patent Marketing Advisory Board and is Given Their "American Dream" Award". CISIONPRWeb. Retrieved November 14, 2018.
  29. ^ "Legendary New York Attorney, Eric M. Creizman, Joins World Patent Marketing Advisory Board". GlobeNewswire News Room. 2015-10-07. Retrieved 2018-11-13.
  30. ^ "World Champion Moti Horenstein Joins World Patent Marketing Advisory Board". PRWEB. Retrieved November 14, 2018.
  31. ^ "The Advisory Board of World Patent Marketing Welcomes Dr. Christopher R. Seaver of Holy Cross Hospital and University of Miami". CISIONPRweb. Retrieved November 14, 2018.
  32. ^ "Ambassador Dell L. Dailey, Former Head of the State Department's Counter Terrorism Office, Joins World Patent Marketing Advisory Board". CISIONPRWeb. Retrieved November 16, 2018.
  33. ^ "UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA Case No. 17-cv-20848-GAYLES" (PDF). Federal Trade Commission Document. Retrieved November 18, 2018.

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