OKLAHOMA STATUTES : INVENTION MARKETING COMPANIES

(As of 12/12/98)

ï¿½15-680.

This act shall be known and may be cited as the "Invention
Development Services Act".

ï¿½15-681.

    As used in the Invention Development Services Act:
    1. "Contract for invention development services" includes a
contract by which an invention developer undertakes to develop or
promote an invention for a customer;
    2. "Customer" means any natural person who is solicited by,
inquires about, seeks the services of or enters into a contract with
an invention developer for invention development services;
    3. "Invention" includes a process, design, asexually reproduced
plant, machine, manufacture, composition of matter, improvement upon
the foregoing, or a concept;
    4. "Invention developer" means any person, firm, corporation or
association and the agents, employees or representatives of the
person, firm, corporation or association which develops or promotes
or offers to develop or promote an invention of a customer in order
that the invention of the customer may be patented, licensed or sold
for manufacture or manufactured in large quantities. The term
"invention developer" does not include:
         a.   a partnership or corporation when all of its partners,
              stockholders or members are licensed by a state or the
              United States to render legal advice concerning patents
              and trademarks, or a person so licensed,
         b.   a department or agency of the federal, state or local
              government, including the inventor's assistance program
              established by the Oklahoma Department of Commerce,
         c.   a charitable, scientific, education, religious or other
              organization registered pursuant to state law,
         d.   a person, firm, corporation, association or other
              entity that does not charge a fee for invention
              development services, or
         e.   any person, firm, corporation, association or other
              entity whose gross receipts from contracts for
              invention development services do not exceed ten
              percent (10%) of its gross receipts from all sources
              during the fiscal year preceding the year in which any
              contract for invention development services is signed.
    For the purposes of this paragraph, "fee" shall include any
payment made by the customer to the entity, including reimbursements
for expenditures made or costs incurred by such entity, but shall not
include a payment made from a portion of the income received by a
customer by virtue of invention development services performed by the
entity;
    5. "Invention development services" includes any act required or
promised to be performed, or actually performed by an invention
developer for a customer.

ï¿½15-682.

A. Every contract for invention development services shall be in
writing and shall be subject to the provisions of the Invention
Development Services Act. A copy of each fully executed, written
contract shall be given to the customer at the time the customer
signs the contract.
B. If one or more contracts are contemplated by the invention
developer in connection with an invention or if the invention
developer contemplates performance of services in connection with an
invention in more than one phase with the performance of each phase
covered in one or more contracts, the invention developer shall so
state in a written statement and shall supply to the customer the
written statement together with a copy of each contract or a written
summary of the general terms of each contract, including the total
cost or consideration required from the customer, before the customer
signs the first contract.

ï¿½15-683.

    A. The customer shall have the unconditional right to cancel a
contract for invention development services for any reason at any
time before midnight of the third business day following the date the
invention developer and the customer sign the contract and the
customer receives a fully executed copy of it. Written notice of
cancellation may be delivered personally or by certified mail. If
given by certified mail, the notice is effective upon the date
certified by signature. Notice of cancellation need not take a
particular form and is sufficient if it indicates, by any form of
written expression, the intention of the customer not to be bound by
the contract. Within ten (10) business days after receipt of the
notice of cancellation, the invention developer shall deliver to the
customer, personally or by certified mail, all moneys paid, any note
or other evidence of indebtedness and all materials provided by the
customer.
    B. Every contract for invention development services shall
contain the following statement in 10-point boldface type immediately
above the place where the customer signs the contract:
    "The three business day period during which you may cancel this
contract for any reason by certified mailing or delivering written
notice to the invention developer will expire on (last date to mail
or deliver notice). If you choose to use certified mail as your
notice, it must be placed in the United States mail addressed to
(Name of Invention Developer), at (Address of Invention Developer's
Place of Business) with first class postage prepaid before midnight
of this date. If you choose to personally deliver your notice to the
invention developer, it must be delivered to him by the end of his
normal business day on this date."

ï¿½15-684.

    A contract for invention development services shall be in the
following form:
    1. A contract for invention development services shall set forth
the information required in this section in at least 10-point type;
    2. The following disclosure statement shall be in boldface type
and shall be located conspicuously on a cover sheet that contains no
other writing:
    "The following disclosures are required by law and are expressly
made a part of this contract: You have the right to cancel this
contract for any reason at any time within three (3) business days
from the date you and the invention developer sign the contract and
you receive a fully executed copy of it. To exercise this option you
may use certified mail or personally deliver to this invention
developer written notice of your cancellation. The method and time
for notification is set forth in this contract immediately above the
place for your signature. Upon cancellation, the invention developer
must return by certified mail or personal delivery, within ten (10)
business days after receipt of the cancellation notice, all money
paid and all materials provided either by you or by another party in
your behalf.
    Unless the invention developer is a registered patent attorney or
registered patent agent, he is not permitted to give you legal advice
concerning patent, copyright or trademark law or to advise you of
whether your idea or invention may be patentable or may be protected
under the patent, copyright or trademark laws of the United States or
any other law.
    No patent, copyright or trademark protection will be acquired for
you by the invention developer or by this contract. Your failure to
inquire into the law governing patent, copyright or trademark matters
may jeopardize your rights in your idea or invention both in the
United States and in foreign countries. Your failure to identify and
investigate existing patents, trademarks or registered copyrights may
place you in jeopardy of infringing the copyrights, patent or
trademark rights of other persons if you proceed to make, use,
distribute or sell your idea or invention.";
    3. The contract shall describe fully and in detail the acts or
services that the invention developer contracts to perform for the
customer;
    4. The contract shall state whether the invention developer
contracts to construct one or more prototypes, models or devices
embodying the invention of the customer, the number of such
prototypes to be constructed and whether the invention developer
contracts to sell or distribute such prototypes, models or devices;
    5. If an oral or written estimate of customer earning is made,
the contract shall state the estimate and the data upon which it is
based;
    6. In a single statement the contract shall set forth both:
         a.   the total number of customers who have contracted with
              the invention developer, except that the number need
              not reflect those customers who have contracted within
              the last thirty (30) days, and
         b.   the number of customers who have received, by virtue of
              the invention developer's performance of invention
              development services, an amount of money in excess of
              the amount of money paid by such customers to the
              invention developer pursuant to a contract for
              invention development services;
    7. The contract shall state the expected date of completion of
the invention development services;
    8. The contract shall state whether and the extent to which it
effectuates or makes possible the purchase by the invention developer
of an interest in the title to the invention of the customer;
    9. The contract shall explain that the invention developer is
required to maintain all records and correspondence relating to
performance of the invention development services for that customer
for a period not less than three (3) years after expiration of the
term of the contract for invention development services;
    10. The contract shall state that the records and correspondence
required to be maintained pursuant to Section 9 of this act shall be
made available to the customer or his representative for review and
copying at the expense of the customer on the premises of the
invention developer during normal business hours upon seven (7) days'
written notice, the time period to begin from the date the notice is
sent by certified mail;
    11. The contract shall state the name of the person or firm
contracting to perform the invention development services, all names
under which said person or firm is doing or has done business as an
invention developer during the previous ten (10) years, the names of
all parent and subsidiary companies to the firm and the names of all
companies that have a contractual obligation to the firm to perform
invention development services; and
    12. The contract shall state the principal business address of
the invention developer and the name and address of its agent in this
state authorized to receive service of process in this state.

ï¿½15-685.

    In either the first written communication from the invention
developer to a specific customer or at the first personal meeting
between the invention developer and a customer, the invention
developer shall make a written disclosure to the customer of the
information required in this section.
    The disclosure shall:
    1. state the median fee charged to all of the customers of the
invention developer who have signed contracts with the invention
developer in the preceding six (6) months, excluding customers who
have signed in the preceding thirty (30) days;
    2. include a single statement setting forth:
         a.   the total number of customers who have contracted with
              the invention developer, except that the number need
              not reflect those customers who have contracted within
              the preceding thirty (30) days, and
         b.   the number of customers who have received by virtue of
              the invention developer's performance of invention
              development services an amount of money in excess of
              the amount of money paid by those customers to the
              invention developer pursuant to a contract for
              invention development services; and
    3. contain the following statement:
    "Unless the invention developer is an attorney, he is not
permitted to give you legal advice concerning patent, copyright or
trademark law or to advise you of whether your idea or invention may
be patentable or may be protected under the patent, copyright or
trademark laws of the United States or any other law.
    No patent, copyright or trademark protection will be acquired for
you by the invention developer. Your failure to inquire into the law
governing patent, copyright or trademark matters may jeopardize your
rights in your idea or invention, both in the United States and in
foreign countries. Your failure to identify and investigate existing
patents, trademarks or registered copyrights may place you in
jeopardy of infringing the copyrights, patent or trademark rights of
other persons if you proceed to make, use, distribute or sell your
idea or invention."

ï¿½15-686.

    A. Every invention developer rendering or offering to render
invention development services in this state shall maintain a bond
issued by a surety admitted to do business in this state, and equal
to either ten percent (10%) of the invention developer's gross income
from the invention development business in this state during the
invention developer's preceding fiscal year, or Twenty-five Thousand
Dollars ($25,000.00), whichever is larger. A copy of the bond shall
be approved by the Attorney General and filed with the Secretary of
State before the invention developer renders or offers to render
invention development services in this state. The invention
developer shall have ninety (90) days after the end of each fiscal
year within which to change the bond as may be necessary to conform
to the requirements of this subsection.
    B. The bond required by subsection A of this section shall be in
favor of the State of Oklahoma for the benefit of any person who,
after entering into a contract for invention development services
with an invention developer, is damaged by fraud or dishonesty of the
invention developer in performance of the contract, by the insolvency
or the cessation of business by the invention developer or by the
intentional violation of the Invention Development Services Act by
the invention developer. Any person claiming against the bond may
maintain an action at law against the invention developer and the
surety company.
    The aggregate liability of the surety company to all persons for
all breaches of conditions of the bond shall not exceed the amount of
the bond.
    C. In lieu of the bond required by subsection A of this section,
the invention developer may deposit with the State Treasurer a cash
deposit in the like amount. The State Treasurer shall not refund a
deposit until sixty (60) days after either the invention developer
has ceased doing business in the state or a bond has been filed which
complies with subsections A and B of this section.

ï¿½15-687.

In connection with a contract for invention development services,
the invention developer shall not take from a customer a negotiable
instrument other than a check as evidence of the obligation of the
customer. A holder is not a holder in due course if he takes a
negotiable instrument taken from a customer in violation of this
section.

ï¿½15-688.

Every invention developer shall maintain all records and
correspondence relating to performance of each invention development
contract for a period of not less than three (3) years after
expiration of the term of the contract.

ï¿½15-689.

    A. The provisions of the Invention Development Services Act are
not exclusive and do not relieve the parties or the contract from
compliance with all other applicable provisions of law.
    B. Any contract for invention development services that does not
comply with the applicable provisions of the Invention Development
Services Act shall be unenforceable against the customer as contrary
to public policy, provided that no contract shall be unenforceable if
the invention developer proves that noncompliance was unintentional
and resulted from a bona fide error in spite of the invention
developer's use of reasonable procedures adopted to avoid any such
errors, and if the invention developer makes an appropriate
correction.
    C. Any contract for invention development services entered into
by a customer with an invention developer who has used any fraud,
false pretense, false promise, misrepresentation, misleading
statement or deceptive practice in respect to that customer with the
intent that the customer rely thereon, whether or not the customer
was in fact misled, deceived or damaged, shall be unenforceable
against the customer. Any waiver by the customer of the provisions
of the Invention Development Services Act shall be deemed contrary to
public policy and shall be void and unenforceable.
    D. Any person who has been injured by a violation of the
Invention Development Services Act by an invention developer, by any
false or fraudulent statement, representation or omission of material
fact by an invention developer or by failure of an invention
developer to make all of the disclosures required by the Invention
Development Services Act may bring a civil action against the
invention developer for the damages sustained together with costs and
disbursements, including reasonable attorneys fees. The court in its
discretion may increase the award of damages to an amount not to
exceed three times the damages sustained or Two Thousand Five Hundred
Dollars ($2,500.00), whichever is greater.
    E. Failure to make the disclosures required by Section 6 of this
act shall render any contract subsequently entered into between the
customer and the invention developer voidable by the customer.
    F. The provision of the Invention Development Services Act shall
have no effect on any contract or agreement entered into prior to
September 1, 1991.

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