Wednesday, August 08, 2007

Is InventSAI breaking the law?

The post is wholly one attorney's opinion and in no way states the opinion of the firm, or attempts to establish any facts.

Today I learned that an Invention Promotion Company, InventSAI, may not be fulfilling their required duty, by law, of disclosing the profitability of companies using their services. In fact, there appears to be a question as to whether The InventSAI Network, LLC is violating not only the the letter but also the spirit of the Amercian Inventors Protection Act of 1999 (the "Act").

Under the Act, whose full text can be seen at http://www.uspto.gov/web/offices/com/speeches/s1948gb1.pdf, an invention promoter or an invention promotion firm must disclose specific information regarding their past business practices. These mandatory disclosures are required by law. Specifically, invention promotion companies are required to provide "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."

InventSAI states "An exact number of inventors commercializing their inventions can only be estimated because InventSAI clients are not obligated to disclose financial data. Nevertheless, based upon client feedback, of the 815 total InventSAI clients contracting for commercialization services, at least 152 have reported commercial success with hundreds of cases still active." Thier online post can be seen here: http://www.inventsai.com/AIPA.html

The law requires InventSAI to disclose "the total number of customers known... to have received a net financial profit.". It appears InventSAI is playing the ostrich game - what I don't "know", I don't have to disclose. However, I read the law differently. The law requires InventSAI to disclose "known" profitably customers. InventSAI by its own admission does not know of any net profitable customer since its customers "financial data" is not disclosed. Therefore, under my estimation, InventSAI is required, by law, to state it knows of zero profitable companies that have used its services.

Moreoever, stating that "at least 152 [customers] have reported commecial success" is misleading and potentially dishonest. If InventSAI does not know their customer's financial data, how can they know if they're commercially successful? I'd like to know what InventSAI's definition of commercial success is. Moreover, by simply providing "commercial succes" data as opposed to "net financial profit" data, InventSAI seems to simply be providing data they want to provide, instead of the data they are REQUIRED to provide, by law.

WHAT ARE THEY HIDING? I welcome a phone call from InventSAI to explain thier position and why they feel they can get around this law in this manner.

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