HB 221 -- Regulation of Invention Developers

Sponsor:  Jacob

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.