WARNING TO FORMER DIRECTORS OF INVENTIONS PROMOTION COMPANY

8 Mar 2006 11:15 AM

The former directors of an inventions promotion company have been warned as to their future conduct after the company ceased trading without resolving the OFT's concerns over its advertising, contract terms and cancellation policy.

The OFT contacted Dublin-based invention promotion company International Technology Evolution and Exchange Limited (ITE) after receiving numerous complaints from consumers who had paid thousands of pounds to ITE for assistance in marketing their ideas. The OFT was concerned that some of the company's advertising could be regarded as misleading, that clear information wasn't given to consumers on their cancellation rights, on prices or on the minimum duration of the contract and that the company's contracts contained terms that could be regarded as unfair.

After discussing these concerns with ITE, the OFT requested undertakings from ITE and its directors that it would not continue with what the OFT considered to be breaches of consumer protection legislation. The undertakings were not provided and the company ceased trading in December 2005. The OFT has now written to the former directors of the company, John Burke and Kenneth Rogers, warning them that it could take immediate action to stop any similar breaches of the legislation committed by any new business that they engage in.

The OFT's advice to any inventor thinking about signing up with an invention promotion firm is to treat this process as they would any other major purchase, and obtain legal advice before signing any contract. Free advice and assistance for inventors is available from the Patent Office, the Institute of Patentees and Inventors, and from inventors' organisations and inventors' clubs.

Christine Wade, OFT Director of Consumer Regulation Enforcement, said: 'Unfair trading practices in this sector can stifle innovation and prevent commercially viable products reaching the market. The OFT will continue to enforce the law so that UK inventors can get their bright ideas into the marketplace.'

NOTES

1. The OFT's concerns over ITE's activities related to the Control of Misleading Advertisements Regulations 1988, Unfair Terms in Consumer Contracts Regulations 1999, and Distance Selling Regulations 2000.

2. The Control of Misleading Advertisement Regulations (CMARs) 1998 aim to protect consumers and businesses from misleading
advertisements and advertisements that make prohibited comparisons. The OFT's main role under the CMARs is to support and reinforce the existing advertising controls exercised by other bodies, not replace them. The OFT will step in where it is in the public interest that an advertisement should be stopped and future misleading advertisements prevented by means of a court injunction against those concerned, or by the threat of it.

3. To come within the scope of the CMARs, an advertisement must be misleading (i.e. it must deceive or be likely to deceive the recipient and affect their economic behaviour, or for those reasons harm the interests of a competitor), and be published in connection with a trade, business, craft or profession, in order to promote the supply or transfer of goods or services, immovable property, rights or obligations. The OFT can take action against anyone appearing to be concerned or likely to be concerned with the publication of a misleading advertisement.

4. The Unfair Terms in Consumer Contracts Regulations (UTCCRs) came into force on 1 October 1999 and replaced the 1994 Regulations. The regulations implement an EC Directive (EC Directive 93/13) in the UK. UTCCRs apply to standard contract terms used by businesses with consumers in contracts made after 1 July 1995. The Regulations say that a consumer is not bound by a standard term in a contract with a seller or supplier if that term is unfair. They also give the OFT and Qualifying Bodies powers to stop the use of unfair standard terms by businesses and prevent anyone recommending such terms, if necessary by obtaining a court injunction.

http://www.oft.gov.uk

PUBLIC enquiries: 0845 7224499 enquiries@oft.gov.uk
OFT reports and consumer information leaflets are available free from:
OFT, PO Box 366, Hayes UB3 1XB 0800 389 3158 oft@ecgroup.uk.com