FTC wins preliminary injunction against operators of World Patent Marketing

At the request of the Federal Trade Commission, the United States District Court for the Southern District of Florida has issued a preliminary injunction against World Patent Marketing, an invention promotion company the FTC charged with being nothing more than a scam. “The record supports a preliminary finding that Defendants devised a fraudulent scheme to use consumer funds to enrich themselves,” concluded United States District Judge Darrin P. Gayles. “Accordingly, the Court finds a preliminary injunction is necessary to maintain the status quo pending a trial on the merits.”

The Federal Trade Commission originally charged the operators of World Patent Marketing with deceiving consumers and suppressing complaints about the company by using threats of criminal prosecution against dissatisfied customers. The court temporarily halted the scheme in March, when the FTC filed a complaint alleging that the defendants charged consumers thousands of dollars to patent and market their inventions based on bogus “success stories,” and never delivered what they promised. Instead, many customers ended up in debt or lost their life savings.

“Defendants made a series of misrepresentations to potential customers to induce them to purchase WPM services. Even after customers made initial investments, Defendants continued making misrepresentations to induce them to purchase more services and to make larger investments,” wrote Judge Gayles. Gayles would go on to specifically detail more than a dozen typical misrepresentations made by World Patent Marketing to customers.

Perhaps most egregious, however, were the threats and intimidation World Patent Marketing directed toward complaining customers. Judge Gayles wrote:

When customers became frustrated and complained to Defendants that WPM did not fulfill its promises, many threatened to report WPM’s actions to the Better Business Bureau (“BBB”), offices of state attorneys general, the FTC, and other consumer agencies. In response, Defendants—including Cooper and WPM’s head of security—and WPM’s lawyers intimidated and threatened customers to prevent them from complaining and to compel them to retract complaints.

Judge Gayles then recounted the events surrounding one particular customer who was intimidated and threatened. Judge Gayles wrote:

After months of trying to receive a refund or services, she filed a complaint with the BBB. She received a letter from a second lawyer who told her that seeking a refund constitutes extortion under Florida law 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).”

Among many other things, this extraordinarily detailed preliminary injunction freezes the assets of the defendants, their officers, agents, employees and attorneys, and all persons acting in concert with any defendant (see pages 39-40 of order). The injunction also prohibits the defendants and all those aforementioned connected parties from making misrepresentations (page 38) and making threats or intimidating anyone making complaints or comments about the products or services offered (page 38-39). The injunction also orders the preservation of records (page 43) and requires the defendants and those aformentioned connected parties to notify the FTC of any new business enterprise (page 43-44).

The injunction will remain in place as the case is litigated.