§ 297. — Improper and deceptive invention promotion.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 35USC297]
TITLE 35--PATENTS
PART III--PATENTS AND PROTECTION OF PATENT RIGHTS
CHAPTER 29--REMEDIES FOR INFRINGEMENT OF PATENT, AND OTHER ACTIONS
Sec. 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.
(Added Pub. L. 106-113, div. B, Sec. 1000(a)(9) [title IV,
Sec. 4102(a)], Nov. 29, 1999, 113 Stat. 1536, 1501A-552.)
References in Text
Section 170(b)(1)(A) of the Internal Revenue Code of 1986, referred
to in subsec. (c)(3)(B), is classified to section 170(b)(1)(A) of Title
26, Internal Revenue Code.
Effective Date
Pub. L. 106-113, div. B, Sec. 1000(a)(9) [title IV, subtitle A,
Sec. 4103], Nov. 29, 1999, 113 Stat. 1536, 1501A-554, provided that:
``This subtitle [enacting this section and provisions set out as a note
under section 1 of this title] and the amendments made by this subtitle
shall take effect 60 days after the date of the enactment of this Act
[Nov. 29, 1999].''
