More on the $26 Million consumer redress decision against the Davison & Associates invention promotion operation

Posted by J Matthew Buchanan at April 20, 2006 02:23 PM

Court Halts Bogus Invention Promotion Claims
Orders $26 Million in Redress For Consumers; USPTO’s Director Jon Dudas Praises Court Decision

A U.S. district court judge has ordered an invention promotion operation to pay $26 million in consumer redress and has ordered a permanent halt to the bogus claims the company used to recruit customers. The court also ordered that in future dealings with consumers, the company make specific, detailed disclosures about their track record in helping inventors market their ideas. “This affirmative disclosure statement is needed due to defendants’ blatant, varied, and repeated misrepresentations . . . ” Judge Gary L. Lancaster of the U.S. District Court for the Western District of Pennsylvania wrote in his decision.

“This outfit is typical of invention promotion scams,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection. “They touted their ability to turn inventors’ ideas into profitable products, but fewer than one percent of the customers who invested in their services got royalties from their patents that amounted to more than they paid the promoters.”

In a complaint filed by the FTC as part of “Project Mousetrap,” the agency charged that the company used Internet ads and classified ads to lure inventors across the country to sign up for their services. The agency charged that they made false claims about their selectivity in choosing products to promote, false claims about their track record in turning inventions into profitable products, and false claims about the relationship they had with manufacturers. They deceptively claimed that their income came from sharing royalties with inventors rather than from the $800 to $12,000 fees they charged inventors.

Jon Dudas, Under Secretary of Commerce for Intellectual Property commented, “Judge Lancaster’s decision sends a strong signal to all those invention promotion and licensing firms that prey upon America’s independent inventor community that fraudulent and unscrupulous practices will not be tolerated.”

The agency alleged that the defendants made false and misleading statements that:

• Consumers who bought their invention-promotion services stand a reasonably good chance of realizing financial gain.

• Their invention-promotion services helped many of their customers' invention ideas become profitable products.

• Their invention-promotion services helped specific inventions become profitable products.

• That they have a vast network of corporations with whom they have ongoing relationships and regularly negotiate successful licensing agreements.

• That their invention marketing services are necessary for consumers to license their invention ideas.

• That they prepare objective and expert analyses of the patentability and marketability of consumers' invention ideas.

Judge Lancaster agreed that the company had engaged in deceptive practices, noting that even after he had issued an order barring deceptive claims, “defendants continued to engage in deceptive practices, albeit in slightly different forms. Based on this past pattern of conduct, there is a very real danger that defendants will alter their business again, yet continue to engage in wrongdoing.”

To prevent those practices, he ordered the company and its principals to pay $26 million for consumer redress and to provide any future clients with a 10-point disclosure statement to allow them objectively to measure the value of the defendants’ assistance. He ordered that when they highlight or advertise specific consumer products or ideas in advertising, they disclose whether the inventor earned royalties that exceeded the total amount of fees paid by the consumer to the defendants. If the defendants claim that they have “matched” or “targeted” an invention to a corporation, they must disclose how many submissions they have made to that corporation in the past five years and the number of licenses entered into with the corporation over the past five years. He required them to disclose that the “Pre-Inventegration” and “modeling” services they sold to inventors were not necessary to achieve licensing agreements and that they disclose that they are not providing consumers with objective or expert opinion of marketability or potential commercial success.

The court also established record keeping provisions to allow the FTC to monitor compliance with Judge Lancaster’s order.

Defendants in this case were Davison & Associates Inc., now known as Davison Design and Development, Inc., Manufacturer's Support Services, Inc., George M. Davison, President and CEO, Thomas Dowler, Gordon M. Davison and Barbara Miele-Davison. The defendants are based in Pittsburgh, Pennsylvania, but have operated nationwide.

Copies of the FTC complaint, and the courts Findings of Fact and Conclusion of Law and the Order for Permanent Injunction are available from the FTC's Web site at and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to thousands of civil and criminal law enforcement agencies in the U.S. and abroad.

MEDIA CONTACT: Claudia Bourne Farrell, Office of Public Affairs | Federal Trade Commission 202-326-2181

STAFF CONTACT: Michael Milgrom, East Central Region | Federal Trade Commission 216-263-3455



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Thomas Bay Says:

April 21, 2006 12:01 PM

Why did the FTC allow Davison to continue thier
defrauding since 1997 & still , remain in business now ?

Clay Says:

April 29, 2006 11:46 PM

Is this going to help those who lost money to Davison Design, get any of there moneys back.
They got me for the same amount as everyone else and after judge Lancaster ordered Davison to pay $26 Million for consumer redress they have contacted me and said that they have licensed my invention with a company in Ohio, and when I acted a little bitter with the guy who called me, he was quick to say that I should be thanking him and Davison about now. DAVISON IS WITHOUT QUESTION A JOKE....... I only whished that I could have known a little sooner that they were so slick and crooked.

Tom Bay Says:

May 15, 2006 03:36 AM

The $26 M , Eight Plus Year Trial

There was two articles on May 12 & 13th , on the Davison v FTC suit , in the Pittsburgh Tribune-Review by Kim Leonard ! It appears in the May 13 article , that the judge has failed to put this fraud firm out of business & get the $26 M redress for us defrauded inventors ! WHY did the FTC folks say , the judge did a great job , on this 8 year case ?

Bernard Campbell Says:

July 13, 2006 03:12 AM

Your article is quite helpful. I was about to relinqish monies to this company without any stipulation of the fees and costs. Their scheme is now to request credit card information, which they can now 'max out' with no stipulation of the fees, estimated number of hours the 'search' will cost, or what the initial payment covers. The contract merely states the usual protections for them.

My good sense, although I'm not a lawyer, is that the contract gives absolutely no protection to the 'client'.

They make no indication of any legal action against them. Their real scheme now is to steal inventor's ideas, especially since most of us jump at the chance to make money. Baloney. Now, they've got my idea and can exploit it.
Good, especially because it has not been reasonably investigated by any manufacturer for at least the twelve years since I originally had the idea.

Later, I'll check this with our state's attorney general's office. I'm certain that their fraud investigation unit has found similar claims, too.

Thank you.

steven willis Says:

August 24, 2006 09:46 PM

i am so happy to have found this info before i spent any time or money on davison i sent 2 ideas then tryed another site they said to to do a search on davison in court and thanks to you i will have nothing more to do with davison but who can i trust with my ideas .

Hubert Rucker Says:

September 10, 2006 06:32 AM

my invention was in a little catalog it was with Daviaon inventwgaration i spent $1000 165 on a generator that use no gas or oil do not sess with DAVISON

Jeffrey N. Burns Says:

October 16, 2006 06:42 PM

I was talking to Davison about my idea. I am filing for a proviional patent with a different company. I spoke to 2 different people at Davison & neither of them said a word about the law suit. I call them back & question the law suit. They said that they thought I would have know about it if I did my homework!!!! They said that it happened in 1997 & things have changed! I hope they don't steal by patent idea!!!!!!!!
Jeff Burns

Glenn Blackburn Says:

October 26, 2006 09:36 PM


Please call the local FBI office in Pittsburgh, PA. 412-432-4000. Davison Design may have violated Federal Telemarketing Laws (especially concerning Seniors) and laws involving the 1999 Inventor's Protection Act. Please check at and search Davison. They are currently trying to mitigate the 26M federal fine ordered by Judge Lancaster this summer. They have the fine delayed at this time because they are trying get it reduced by taking it to a higher court. If the FBI receives numerous complaint calls it will get their attention and they will investigate. Also, contact Mr. Jim Parsons at WTAE. He has ran several stories about Davison and there are several inventors attempting to get him to run a follow up story on Davison's operation. I have spent over 13k with Davison and they offered me 6500 to settle - this in unacceptable and they are using as an arbitrator. I have had it... I have been trying to get my money back from Davison since April 2005. Mr. Parsons information is: Jim Parsons


400 Ardmore Blvd.

Pittsburgh, Pa. 15221

412-244-4635, Fax (412) 224-4628

I am interested in gathering the emails and contact information of other inventors - feel free to contact me via email.


Leon J. Horne Says:

November 14, 2006 04:11 PM

Early in 2001 my wife and I submitted an original idea (for which I'd already applied for a patent). Tony Valkanis gave us every reason to believe that we would stand a very good chance of getting my idea manufactured with the help of their Research & Development nad Market Promotions departments. I paid Davison & Associates in the neighborhood of $15,000 plus the promise of 10% royalty of proceeds if the invention actually went to market.
Their "prototype" of my invention was very poor quality: a safety switch that I'd specified never was incorporated into their design (resulting in my nearly having burned up the prototype when it was sent to me at my firm request)... Needless to say, my idea's never reached the market!
This is the first I've heard of any judgement against Davison & Associates
is there any way for me to apply for a refund of the money I'd paid to Davison & Associates plus interest and/or damages? I can't afford a lawyer, and my wife and I are not financially able to just walk away from the money we'd invested in good faith!
Please advise... Thanks!

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