Patent Deception : Planet Money How World Patent Marketing stole nearly $26 million. And how the acting attorney general was involved.

Patent Deception

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Brittany Shammas.


FOUNTAIN: You are a reporter at the Miami New Times. Where does this story start?

SHAMMAS: So for Steve Harris, this story starts when he's on the floor in his living room, reaching under his couch.

STEVE HARRIS: I adopted a new puppy who happened to like tennis balls. And unfortunately, all the balls were going under the bed, the couch, the dresser.

FOUNTAIN: Steve is this joyous guy. He's got this great goatee. He loves dogs, obviously. But he has back problems. And this new puppy was making them worse.

SHAMMAS: So Steve goes to the store. He gets a Singer sewing machine, a bunch of fabric and some stuffing. He sews this big, long tube. And he shoves it under the couch. It was like a bumper.

FOUNTAIN: He rolled the ball towards the couch, and it didn't go under.

HARRIS: And when the ball rolled toward the couch, it bounced out. And I was like oh, my God, look what I just did.

FOUNTAIN: You invented something.

HARRIS: I invented something.

SHAMMAS: He called it Teddy's Ballie Bumpers.

FOUNTAIN: Is your - is the dog that was around when you had this - when you made this invention, is it still alive?

HARRIS: He's right here with his - with his legs in the air. Would you like - (laughter) - would you like to interview Teddy?



FOUNTAIN: Did you name the thing after him?

HARRIS: I did, Teddy's Ballie Bumpers.

FOUNTAIN: (Laughter).

HARRIS: OK, Teddy, you want to talk to Nick? He's looking at the phone. And he - and he actually just yawned, so I don't think he's interested.

FOUNTAIN: Not the interview type, all right.

HARRIS: No, he's not. He's a good boy.

FOUNTAIN: A few days later, Steve's watching TV.

HARRIS: And an ad came up for World Patent Marketing and a telephone number. And so I called it. They said, this is World Patent Marketing. How can we help you? And I told them about - that I had an idea. And they told me that before I explained what my idea was, they wanted my email address. And they wanted to send me a privacy statement that, you know, I wouldn't have to worry about my idea of getting out.

FOUNTAIN: That sounds legit.

HARRIS: Yeah - well, they were already trying to, you know, make sure that no one was going to steal my product. So I felt, wow, that's - you know, that's pretty good.


FOUNTAIN: Steve didn't know it yet, but he'd walked right into a trap. Hello, and welcome to PLANET MONEY. I'm Nick Fountain.

SHAMMAS: And I'm Brittany Shammas.

FOUNTAIN: Brittany is a reporter for the Miami New Times. And Brittany, you wrote this amazing, mindblowing article about the world that Steve was about to enter.

SHAMMAS: It's a story about inventors. Inventors are the most optimistic people out there. They imagine a better future. And that's why they're so important.

FOUNTAIN: And it's also why this company preyed upon them.

SHAMMAS: And left them empty-handed and out of thousands, or even hundreds of thousands, of dollars.

FOUNTAIN: Maybe with the help of the acting U.S. attorney general. But we'll get there.


FOUNTAIN: All right, Brittany, you've been reporting on World Patent Marketing for a while now, right?


FOUNTAIN: Is this the craziest story you've ever worked on?

SHAMMAS: It's pretty crazy. But I've also written about, you know, cough syrup theft rings for purple drank that possibly involved Lil Wayne and Chris Brown as customers. So that was crazy too.

FOUNTAIN: OK, we'll do that another day. Where does this story go now?

SHAMMAS: So Steve gets a confidentiality agreement. He signs it. He sends it back in. Then he hears from a representative of World Patent Marketing. It's this British guy who's in New York.

HARRIS: And he was like, wow, this is fantastic - what a great idea.

FOUNTAIN: Really talking it up, and then the guy said the next step was that World Patent Marketing could do some research.

HARRIS: He told me that for the price of nineteen ninety-five, they would be able to do an analysis.

SHAMMAS: So Steve is told that the market analysis is going to tell him whether there are any other products out there like his. And if so, are they patented? It also is going to tell him how marketable his product is and how World Patent Marketing could market it for him.

HARRIS: And then in six weeks, I would get a packet back. And it would tell me everything. So I was like, oh, my God, for nineteen ninety-five?


HARRIS: I mean - and if it fails, hey, I spent nineteen ninety-five. You know, and I'm saying $1,995...


HARRIS: Not $19.95 (laughter).

FOUNTAIN: Wait. Wait. Wait. Sorry, I thought you were talking, like, $20 that whole time.

HARRIS: No. No, you're talking $1,995. But as an investment in your future, you know, you've got to be in it to win it. And so that's what I did.


HARRIS: I went in it to win it. (Laughter). That's what I did.

SHAMMAS: So Steve gave the company his credit card information. And then after that, he just waited.

HARRIS: Waited one week, waited two weeks, three weeks, four weeks, five weeks. At six and a half weeks, a package came Federal Express...


HARRIS: ...From World Patent Marketing. Opened up the envelope, and there was a packet in there probably around, I would say, 50 pages.


HARRIS: It was a very, very - it was thick. It was very thick. It was very impressive.

FOUNTAIN: In it were all these drawings, these, like, mock-ups and also a market analysis supposedly done by Baylor University.

SHAMMAS: The report said that Steve's product didn't have any market competition. There was nothing else like it that was patented.

FOUNTAIN: Was Teddy's Ballie Bumpers, like, a viable product?

HARRIS: Yes, it was. So there was a section that gave you a score. And my score was an 80, which was the top - 79 to 100 was a probable, high probable sale to box stores.

FOUNTAIN: Wow, so Bed Bath & Beyond, not so far away.

HARRIS: Oh, yeah. Oh, yeah. Oh - all of them - oh, Walmart, all of them. I mean, the dream, right then and there, became a reality.

FOUNTAIN: Also in the packet were steps on what he could do next. There were options, packages that World Patent Marketing offered. And Steve, who was pretty excited at the time, started looking in to the primo one.

HARRIS: It was a universal patent protection package. And what that does - did...

SHAMMAS: World Patent Marketing said if he got this package, they would patent his invention in 21 countries. They would find him a manufacturer, and they would do all the marketing for the product.

HARRIS: And that was in the low $20,000.

FOUNTAIN: So that was one of several options.

HARRIS: Yeah. And there were other options too. But I figured that, because my score came in as high as it did, I would want to protect myself in other countries.

FOUNTAIN: Because you didn't want people ripping you off in other countries.

HARRIS: Exactly.

SHAMMAS: Steve went ahead and flew to New York to meet with his financial adviser to talk to him about this package.

FOUNTAIN: And his financial adviser thought the packet was legit, and they decided to go for it.

SHAMMAS: Steve filled out some application paperwork for his patent. He was told that his product needed to be patent pending before he could move forward.

FOUNTAIN: So Steve, who was full of creative energy and, like, nervous because he wanted to get started on this, couldn't go out and talk to manufacturers or marketers.

HARRIS: The feet are tapping. And, you know, you're looking around and thinking, oh, man, oh, man. It's got to come through. It's got to come through. And sure enough, it did. It did...

FOUNTAIN: Oh, it did.

HARRIS: Oh, yeah, I did get a - it was the receipt that it had actually been filed.


HARRIS: And that all the paperwork was received by the U.S. Patent Office and that my product was in patent pending status.

SHAMMAS: For Steve, this was huge.

HARRIS: I was an inventor. I was - I was that person, like the person who invented the steel mills and all the other crazy things that were invented. I was now part of that family. And, you know, it was just the thought of being an inventor that made me feel so wonderful.

SHAMMAS: So after that, Steve hears from the CEO of World Patent Marketing himself, a guy named Scott Cooper.

HARRIS: He was definitely a New Yorker....

FOUNTAIN: (Laughter).

HARRIS: ...Someone who - you know, now, I'm not taking anything away from New Yorkers.

FOUNTAIN: No, no, no, no.


FOUNTAIN: Was this guy, Scott Cooper - was he stoked about your product?

HARRIS: Oh, he told me - he told me that this was going to be the product of his company, that he was going to - I was going to be the top inventor of World Patent Marketing.


HARRIS: Oh, yeah. Oh - oh, yeah. Oh (laughter). It gets it gets a whole lot better.

SHAMMAS: We should say here, we did try contacting Scott Cooper to get his side of this. But he didn't get back to us.

FOUNTAIN: So Steve is pretty excited to be working with World Patent Marketing at this point. But things are going a little slow for him. You know, he's like, I want to be in every Walmart yesterday. So he doesn't even wait for World Patent Marketing to find a manufacturer. He finds one for himself.

HARRIS: And we were a go.

FOUNTAIN: So Scott - Scott and World Patent Marketing were not upset that you had found your own person.

HARRIS: Oh, no. Oh, no. Oh, no, no.

FOUNTAIN: It was the opposite. Cooper calls him up and is like, we need to do a marketing blitz. We've got to send out a press release across the country.

SHAMMAS: And then he sends him a draft of the release.

HARRIS: I said, Scott - I said, the only thing is, it says that World Patent Marketing got me the manufacturer. He says, well, it doesn't really say that. It says that, you know, we're sort of in on it. And I said, but - I said, I got my manufacturer. He says, well, don't worry about that. We want to get people motivated. And I said, well, OK. He says trust me, trust me. Well (laughter) trust me.

SHAMMAS: So it's a few days later. Steve is at a Christmas party in California. He's standing by the pool.

FOUNTAIN: And he gets an email from Scott Cooper. Inside it is the press release.

HARRIS: Saying that Steve Harris just received this incredible Christmas present of a manufacturer. And so it went everywhere. And, in fact, not only did it go everywhere, but it also went on his website.

FOUNTAIN: So you were, like - you were a big success story for these guys.

HARRIS: I - actually, so I was the success story that baited hundreds of people.

FOUNTAIN: Wait, what?

HARRIS: Thousands of people.

SHAMMAS: After the break, we meet someone who took the bait.

FOUNTAIN: She and Steve would end up taking this whole thing down.


FOUNTAIN: OK, we're going to pause Steve Harris' story for a second because we need to meet Crystal Carlson. Brittany, tell us about Crystal.

SHAMMAS: Crystal Carlson is an amazing investigator. She knows her way around public records. She knows how to pull court documents. She, for many years, had her own plumbing business.

CRYSTAL CARLSON: And I also homeschool my children. I have seven kids. So that's, like, a full-time job in its own.

FOUNTAIN: Crystal got involved with World Patent Marketing after Steve. She was living in Arizona. And at the time, she would see these reports on the local news about people leaving their kids in hot cars. So she was worried about that 'cause, you know, seven kids.

SHAMMAS: Crystal went from civilian to inventor one day when she was coming home from the grocery store with her family.

CARLSON: As we're bringing groceries in, I've got two that have to go potty. And I'm trying to get them to the toilet. And then the dog made an accident. So then it's like, OK, we need to get this cleaned. And then I'm, like, asking my husband, is everything out of the vehicle? And he's just staring at me. And I was like, where's the baby? (Laughter).

SHAMMAS: So Crystal invented something.

FOUNTAIN: Yeah, like a pressure sensor that detected when a kid was still in the car.

SHAMMAS: And would alert Crystal or any other parent when they were walking away with the child still there.

FOUNTAIN: Did you, like, work up a prototype?


FOUNTAIN: What did it look like?

CARLSON: Horrible.


CARLSON: I tore apart a bunch of items, so it was not very...

FOUNTAIN: It was, like, a real American tinker invention.

CARLSON: Yeah, yes.

SHAMMAS: Crystal knew she needed patent protection.

FOUNTAIN: So she went looking for someone to help her. And remember, she really does her homework.

CARLSON: I'm a very big research nut. So I really poured into it. And I found so many different companies. And they had all these different things that they said that they did. And then, when you tried to research on them, you couldn't even find any of their products out there. So it was really hard for me to feel like I could trust them.

FOUNTAIN: But then she found this one site, World Patent Marketing. It was super professional. The CEO of the company was supposed to be very involved with inventors. And Crystal liked that. And also, they had some success stories.


HARRIS: Hi, my name is Steve Harris.

CARLSON: I'd seen Teddy's Ballie Bumpers. And so I decided I'm going to Google search his product. And lo and behold, I came across his product...


HARRIS: From there, we got a manufacturer.

CARLSON: ...For sale on a website. And every other company, I can't find a single invention. So that's promising.


HARRIS: Thanks to World Patent Marketing - right, Teddy?

FOUNTAIN: So Crystal's looking around. And she finds this page on the World Patent Marketing website, touting its advisory board.

CARLSON: They just had this little thing that said, meet our advisory board. And they had all these images of the people who were on the advisory board. And...

FOUNTAIN: Do they seem impressive?

CARLSON: You know what? It did seem impressive because a lot of those people had backgrounds to them that would make you feel that they were important - government officials, ex-military officials.

SHAMMAS: One of these officials was Congressman Brian Mast. Another one was Dell Dailey, a former State Department official.

FOUNTAIN: And another was Matthew G. Whitaker.

SHAMMAS: Whitaker was a former U.S. attorney for the Southern District of Iowa.

FOUNTAIN: And was just tapped to be the acting attorney general. He is the most powerful law enforcement official in the U.S. right now.

SHAMMAS: Whitaker was paid for his role on the advisory board, close to $10,000 according to court documents. He was also listed prominently in press releases about the company, and he recorded videos for them.

FOUNTAIN: There's one that we saw online where he's talking up this chair for a hot tub.


MATTHEW WHITAKER: It's a unique design that's going to help lots of people that have mobility issues get in and use their hot tub in a safe manner.

FOUNTAIN: And here's another one of him describing this, like, razor blade cover.


WHITAKER: It's a simple sign but a unique design.

FOUNTAIN: We did reach out to the attorney general's office. And a spokesman told us that Matthew Whitaker had no knowledge of any fraud happening at World Patent Marketing.

SHAMMAS: World Patent Marketing is just the latest version in a long-running con that has been taking advantage of inventors for decades now. But World Patent Marketing is unique because of how much money it was able to get out of people.

FOUNTAIN: People like Crystal. World Patent Marketing did mostly the same sell on Crystal as they did to Steve - the confidentiality agreement or whatever. But there were a couple new tricks.

SHAMMAS: This time they made her wait before they took her money. And they told her it was because they had another lady who had an idea just like hers.

CARLSON: But you were more prepared than she was, so they ultimately decided to move forward with you.


CARLSON: Now I have this feeling of, oh, my goodness. There's another person out there trying to move forward with the same thing as me. I'm in a race.

FOUNTAIN: Yeah, you got to get moving, right?


FOUNTAIN: Crystal sold an old car, scrounged together some change and paid for the marketing study. And again, it found her product was a winner. World Patent Marketing told her that she needed to pull together $36,000 for the global patent protection plan. This package was the works. They said it would get her patent protection everywhere. It would get her copyrights, trademarks and a licensing deal.

SHAMMAS: They told her that to raise the money, she could just go borrow from friends and family. Or maybe she could take out a second mortgage on her house or go get a personal loan.

CARLSON: I don't even know a person personally who could go out there and get a personal bank loan for $35,000 cash.


CARLSON: So I can't do that.

SHAMMAS: So she turned instead to her friends and family. And she showed them the packet that she had received from World Patent Marketing about the viability of her product.

FOUNTAIN: Crystal told her friends and family what her contact at World Patent Marketing told her, that they would make their money back in six months. And so her friends and family gave her the money and sent World Patent Marketing $36,000.

SHAMMAS: Pretty soon after this, Crystal realized her mistake. Her patent attorney kept making errors. She was having to correct them.

FOUNTAIN: And this is the part of the story where the doggedness of the inventor combines with suspicion and becomes a powerful tool. Crystal starts researching everything she can - patent law, licensing, marketing. And she starts calling World Patent Marketing, pretending like she doesn't know about these things and drilling them.

CARLSON: And, well, there stopped all the phone calls.

SHAMMAS: So then Crystal started looking for other World Patent Marketing customers to see if they were having similar issues.

FOUNTAIN: How'd you do that?

CARLSON: Facebook - I mean, I know it sounds crazy. But...

SHAMMAS: The first person that Crystal tries to find is that guy from the videos, the guy whose product World Patent Marketing was bragging about.


HARRIS: Not again. On your knees or straining your back, looking under the couch or bed for your pet's toys or the remote control?

FOUNTAIN: She had to find him. And the way that she did was pretty clever.

CARLSON: In every single article they wrote, it was Steve H. You know, so it was - I didn't know who Steve was, Steve H. So I went through all the way, like, two years back. And then I found this Ballie Bumpers thing they were promoting. And then I clicked to view who all liked it. And I see this Steve Harris. And I'm like, that's a Steve H.

SHAMMAS: Crystal was not the only one that was reaching out to Steve. Steve was hearing a lot from other people who were sending him messages.

HARRIS: And they were asking me if I was a multimillionaire. How did I get into the box stores?

SHAMMAS: Steve had been really busy trying to get his product into stores. He had had 500 Ballie Bumpers manufactured with the manufacturer that he himself found. And he'd been marketing the product on his own.


HARRIS: ...And you'll receive the air inflation pump free. Order Teddy's Ballie Bumpers today. Your dog will never lose his balls again.

FOUNTAIN: So Crystal messaged him and was like, how's your product going?

HARRIS: And we start exchanging stories to realize that we were being scammed.

FOUNTAIN: And then Steve received a letter from the U.S. Patent Office.

HARRIS: And I open the envelope. And I pretty much hit the floor because the letter contained information that my patent went abandoned.

FOUNTAIN: World Patent Marketing hadn't submitted his patent application properly. And then, when the patent office followed up with questions, they hadn't responded.

SHAMMAS: Steve's dreams of being an inventor and his image of himself as an inventor was all coming crashing down around him.

HARRIS: One of the sons of the manufacturers texted me at 3 o'clock in the morning and woke me up and said, you'd better see this. And it was a commercial for a product that was just like mine that was published five years prior. So I had no product.

FOUNTAIN: Holy smokes.

HARRIS: So it was - it was devastation. It was complete devastation.

FOUNTAIN: So you'd spent three years of your life, roughly $110,000. Had you sold any?

HARRIS: We had sold probably about 30 of them.

FOUNTAIN: And then you haven't sold one since.

HARRIS: I can't. I'd be infringing on someone else's patent.

FOUNTAIN: How does that feel?

HARRIS: I - I - I can't - I can't go - I can't go there. That's a place I can't go.

FOUNTAIN: Meanwhile, Crystal was reaching out to everyone she could, trying to warn them off.

SHAMMAS: One of her biggest moments was when she found out about a police officer who had already spent money with World Patent Marketing and was planning to spend thousands more.

FOUNTAIN: She called him.

CARLSON: And I told him what happened to me. And I told him what happened to Steve. And at that point, he said thank you.

FOUNTAIN: How did you feel right then?

CARLSON: Really good.

FOUNTAIN: Yeah. You should feel good about that.

CARLSON: I'm sorry, I'm getting teary eyed.

FOUNTAIN: It's fine.

CARLSON: From my personal experience, you know, I borrowed $36,000 from friends and family. And when you do that, it makes you feel horrible when you're able - you're not able to give it back. I'm sorry.

FOUNTAIN: It's fine. It's fine.

CARLSON: I haven't talked about it, like, for a while.

FOUNTAIN: Did you ask them for your money back?

CARLSON: I did. I did. I sent a certified letter.

SHAMMAS: Crystal tells Scott Cooper, give me my money back, or I'm going to report you to the FTC.

FOUNTAIN: Immediately, she got an email back.

CARLSON: He threatened me that he was not doing these things that I claimed he was doing. And he's got all these powerful people, part of the Obama administration, on his advisory board. And why would any of these people want anything to do with him if he was doing the things that I claimed?

SHAMMAS: Crystal shut her computer.

CARLSON: And decided, OK, we're doing this. Called the FTC, called the patent office, started trying to reach out to anybody else I could. And man, we grew our numbers fast. That's when we went from 10 to 20 to 50 to 100. So this letter to him happened in April. And by December, we were filing a class action lawsuit. By August, I was already talking to the FTC in private because they were doing a soft investigation.

SHAMMAS: So in 2017, the FTC comes in. And they raid the offices of World Patent Marketing. They grab all the paperwork in the office. And they file a complaint accusing Scott Cooper and World Patent Marketing of bilking thousands of people out of almost $26 million.

FOUNTAIN: We reached out to the FTC, and they declined to comment. But there were tons of documents they submitted in court, and a lot of crazy stuff came out. The CEO, Scott Cooper, had former Israeli military as security guards. He would tell people they were trained in Krav Maga and used them to threaten people. Another thing that came out were the scripts.

SHAMMAS: Scripts that sales representatives would use when they were trying to persuade somebody to send them money. A lot of the customers had felt like their ideas were unusual in being approved. But it turned out that they were all working off of a script. And the FTC found no rejection script.

FOUNTAIN: One more thing that came out in court was an email from Matthew G. Whitaker, the now-acting attorney general. He was put in place last week, after Jeff Sessions was fired. This email seems like it's to someone who's complaining about World Patent Marketing.

SHAMMAS: It basically was telling this person that they could face potential civil or criminal consequences if they were doing what sounded like from, you know, the context of the email, reporting to the Better Business Bureau or smearing the company online. We asked Crystal about this.

FOUNTAIN: How do you feel about this - this guy who's now one of the most powerful people in America being involved with this company?

CARLSON: My personal opinion is, I do not know Mr. Whitaker personally. But as far as any involvement with World Patent Marketing, World Patent Marketing was a scam. And Scott Cooper was a con man. And he conned everyone.

SHAMMAS: Both Crystal and Steve feel this way, that if they could fall for it, so could anyone - including a former U.S. attorney.

FOUNTAIN: I called the court-appointed receiver this morning, the guy who's trying to collect money for the victims. And he told me while other board members have returned the money they made, Whitaker has not. Scott Cooper, the architect of this whole thing, the CEO of World Patent Marketing, he settled with the FTC without admitting or denying anything. And Brittany, you've actually been on the hunt for him this week, right?

SHAMMAS: Yeah, so Scott Cooper is going through some marital issues right now. He was supposed to be in court for a hearing earlier this week. But he didn't show.

FOUNTAIN: OK, wrap this up. Where is everyone now? Where are our inventors?

SHAMMAS: Steve is retired. He's not inventing stuff anymore. He was never able to sell all the Ballie Bumpers that he'd manufactured. Crystal is still tinkering away. She's been really busy reaching out to car companies, trying to sell them on her idea.

FOUNTAIN: And Matthew Whitaker is the acting attorney general of the United States of America.


FOUNTAIN: If you know of a scam that's out there, let us know. We'll let other people know, We're also on Facebook and Twitter. And Brittany, you have been breaking news left and right about this. Where can people find that work?

SHAMMAS: On Twitter, @britsham, or at the Miami New Times website.

FOUNTAIN: Or you can find it on any street corner in Miami. God bless alt weeklies.

SHAMMAS: Long live alt weeklies.

FOUNTAIN: Brittany's original story on this is amazing. You should go read it right now. We spent five days on this story. She spent five weeks on hers. We have a link to it on our website. Today's show was produced by Sally Helm. Our editor is Bryant Urstadt. Our supervising producer is Alex Goldmark.

SHAMMAS: Thanks to my editors, Tim Elfrink and Chuck Strouse.

FOUNTAIN: Thanks, Tim and Chuck. I'm Nick Fountain.

SHAMMAS: And I'm Brittany Shammas. Thanks for listening.


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