THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, May 25, 1996 TAG: 9605250490
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: MANASSAS, VA. LENGTH: 55 lines
A federal judge has halted the business operations and frozen the assets of a Virginia company that claims that it helps inventors patent their products and get them to market.
Thursday's action came a day after 20 FBI agents raided the offices of Global Patent Research Services Inc. in an investigation of what government officials call an elaborate fraud scheme.
``Global is engaged in an elaborate fraudulent scheme targeted at amateur inventors,'' according to a complaint filed by the Federal Trade Commission.
Jodie Bernstein, head of the FTC's consumer protection bureau, also confirmed that Global and its director, Kenneth A. Rogers, are under investigation by the U.S. attorney's office in Alexandria for possible criminal violations.
Rogers and Global officials could not be reached Friday for comment. A recording at the company's headquarters, also known as Global Development Services, said technical difficulties from installation of a new telephone system made it impossible to accept calls and asked that callers try again in several days.
Global has done millions of dollars worth of business since it opened in 1993, said FTC attorney Peter Lamberton. It advertises its services on national television stations, including the Discovery Channel. Global employs about 12 people in its Manassas office, and uses 80 to 100 telephone solicitors nationwide to call inventors and offer ``free'' assessments of their ideas, court papers say.
Robert Lougher, president of Inventors Awareness Group, said Global is one of more than 20 companies that take in an estimated $200 million from 25,000 inventors annually.
Rogers testified before a congressional subcommittee in 1994 that for six years he had worked for a company that charged inventors thousands of dollars and fraudulently promised to help them market their creations. Rogers told the panel he had reformed.
Court papers said inventors pay Global between $500 and $800 for a product research report, which is a standard, boilerplate report. In the second phase of the patenting process, the papers say, Global charges the customer $6,000 to $9,000 for filing the patent applications and promoting the idea.
The company tells investors they can make hundreds of thousands of dollars annually on their products and promises to launch major publicity campaigns, none of which is true, the FTC complaint alleges.
``The likelihood that an inventor will achieve financial gain or even an expression of interest from a manufacturer as a result of Global's services is extraordinarily low, if not nonexistent,'' the complaint said.
The probability of any inventor bringing an idea to commercial success is less than 1 percent, marketing experts say.
The FTC has charged Global under its unfair or deceptive practices act and its telemarketing rule. It has asked the court for a permanent injunction to keep the company from doing business. by CNB