HB0221 Jacob, Kenneth B

P R E F I L E D

HB 221 -- Regulation of Invention Developers

The bill establishes the requirements and form for an invention development contract and includes a description of the services to be provided by the invention developer, who is defined as a person who promotes or develops an invention of another for a fee. The developer must submit a quarterly report to the customer of services provided and information disclosed. Payments under any contract between a customer and an invention developer are prohibited until 7 working days after the contract is signed and the contract can be terminated by either party at any time prior to a payment being made.

The invention developer is required to disclose in any advertisement the fact that a fee is charged for services. In addition, the developer must disclose to any customer on the first communication a statement of the fee or the range of the fee, a statement of services provided under any contracts, and a statement of confidentiality and nonuse of any information provided by the customer. The developer is prohibited from using any confidential information for his or her own benefit.

Invention developers are required to post a bond with the director of the Department of Economic Development in the amount of 5% of the developer's gross income during the last fiscal year or $25,000, whichever is greater.

Any invention development contract which does not meet these requirements or is entered into as a result of a misrepresentation by the developer is void as against public policy. Any developer who violates the provisions of this bill is civilly liable to the injured party and subject to an award of damages equal to twice the amount of actual damages, punitive damages and reasonable attorney's fees. Enforcement of these provisions is handled by the Attorney General, who may recover a civil penalty of $5,000 and equitable relief.