NEBRASKA STATUTES : INVENTION MARKETING COMPANIES

(As of 12/12/98)  
INVENTION DEVELOPMENT SERVICES DISCLOSURE ACT

  Note:  As of August 27, 1998 no such firms as described below are registered with the
             Nebraska Secretary of States office.  To check and see if an invention marketing
             firm is registered with the Secretary of State as the law prescribes,
             call (402) 471-2554



 ACT, HOW CITED.
                87-601.    Sections 87-601 to 87-610 shall be known and
           may be cited as the  Invention  Development  Services  Disclosure
           Act.





 TERMS, DEFINED.
                87-602.    For  purposes  of  the Invention Development
           Services Disclosure Act:
                     (1) Contract for invention development  services  shall
           mean  a  contract  by  which  an  invention  developer undertakes
           invention development services for a customer;
                     (2) Customer shall mean any person, firm,  partnership,
           corporation,  or  other  entity  that  enters into a contract for
           invention development services, except any firm, corporation,  or
           other  entity,  other than a natural person, purchasing invention
           development services as an adjunct to the traditional  commercial
           enterprises in which it engages as a livelihood;
                     (3) Invention shall mean a discovery, process, machine,
           design,   formulation,   product,   concept,   or  idea,  or  any
           combination thereof, whether patentable or not;
                     (4) Invention developer shall mean  any  person,  firm,
           partnership,  or  corporation  and  any agent, employee, officer,
           partner, or independent contractor thereof who offers to  perform
           or  performs  for  a customer any invention development services.
           Invention developer shall not include:
                     (a) Any department or agency of the federal, state,  or
           local government;
                     (b) Any   nonprofit,   charitable,   scientific,   or
           educational organization described in section 170(b)(1)(A) of the
           Internal Revenue Code of 1986, as amended;
                     (c)  Any  attorney  acting  within  the  scope  of  the
           attorney's professional license;
                     (d) Any person duly registered before the United States
           Patent  and  Trademark  Office  acting  within  the scope of that
           person's professional license; or
                     (e) Any  person,  firm,  corporation,  association,  or
           other entity that does not charge a fee for invention development
           services other than any payment made from a portion of the income
           received  by  a customer by virtue of such acts performed by such
           entity.  For purposes of this subdivision, fee shall include  any
           payment   made   by   the   customer  to  such  entity  including
           reimbursement for expenditures made or  costs  incurred  by  such
           entity; and
                     (5)  Invention  development services shall mean any act
           involved  in  the  evaluation  of  an  invention  for  commercial
           potential  and  the marketing, brokering, or promoting of such an
           invention done by or for an invention developer for  the  purpose
           of  procuring  a  licensee  or buyer for an intellectual property
           right in the invention.




 CONTRACT FOR INVENTION DEVELOPMENT SERVICES; REQUIREMENTS; OPTION
          TO TERMINATE.
                87-603.    (1) Every contract for invention development
           services shall  be  in  writing  and  shall  be  subject  to  the
           Invention  Development  Services  Disclosure Act.   A copy of the
           written contract shall be given to the customer at the time he or
           she signs the contract.
                     (2) If it is the invention developer's normal  practice
           to seek more than one contract in connection with an invention or
           if  the invention developer normally seeks to perform services in
           connection with an invention in more  than  one  phase  with  the
           performance  of  each  phase  covered  in  one or more subsequent
           contracts, the invention developer shall so state in  writing  at
           the  time  the customer signs the first contract and shall supply
           to the customer such writing together with a written  summary  of
           the   developer's  normal  terms,  if  any,  of  such  subsequent
           contracts, including the approximate amount  of  the  developer's
           normal  fees or other consideration, if any, that may be required
           from the customer.
                     (3) Notwithstanding any contractual  provision  to  the
           contrary,  no payment for invention development services shall be
           required, made, or received until three business days  after  the
           date  on  which  the customer receives a copy of the contract for
           invention development services signed by the invention  developer
           and  the customer.  Delivery of a promissory note, check, bill of
           exchange, or negotiable instrument of any kind to  the  invention
           developer  or  to  a third party for the benefit of the invention
           developer, irrespective of the date or dates  appearing  in  such
           instrument,  shall  be  deemed  payment  for  the purpose of this
           section.
                     (4) The parties to a contract for invention development
           services shall have the option to terminate  the  contract  until
           payment  is  made.    The  customer  may  exercise  the option by
           refraining from making payment to the invention developer.    The
           invention  developer  may  exercise  the  option  to terminate by
           giving to the customer a written notice of its  exercise  of  the
           option,  which written notice shall become effective upon receipt
           by the customer.





 CONTRACT   FOR   INVENTION  DEVELOPMENT  SERVICES;  COVER  SHEET;
          CONTENTS; INVENTION DEVELOPER; DUTIES.
                87-604.  (1) Every contract for  invention  development
           services  shall  have  a  conspicuous  and  legible  cover  sheet
           attached with the following notice printed thereon in boldface of
           at least ten-point type:
                     THIS CONTRACT BETWEEN YOU AND AN INVENTION DEVELOPER IS
           REGULATED BY THE INVENTION DEVELOPMENT SERVICES  DISCLOSURE  ACT.
           YOU ARE NOT PERMITTED OR REQUIRED TO MAKE ANY PAYMENTS UNDER THIS
           CONTRACT  UNTIL  THREE BUSINESS DAYS AFTER YOU SIGN THIS CONTRACT
           AND RECEIVE A COMPLETED COPY OF IT.
                     IF YOU ASSIGN EVEN A PARTIAL INTEREST IN  THE  IDEA  OR
           INVENTION TO THE INVENTION DEVELOPER, THE INVENTION DEVELOPER MAY
           HAVE  THE  RIGHT  TO  SELL  OR  DISPOSE  OF THE IDEA OR INVENTION
           WITHOUT YOUR CONSENT AND MAY NOT HAVE TO SHARE THE  PROFITS  WITH
           YOU.
                     THE  TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED WITH
           THE INVENTION DEVELOPER SINCE (date)  IS  .............  .    THE
           TOTAL  NUMBER  OF  CUSTOMERS KNOWN BY THIS INVENTION DEVELOPER TO
           HAVE  RECEIVED,  BY  VIRTUE   OF   THIS   INVENTION   DEVELOPER'S
           PERFORMANCE,  AN  AMOUNT OF MONEY IN EXCESS OF THE AMOUNT PAID BY
           THE CUSTOMER TO THIS INVENTION DEVELOPER IS .............. .
                     THIS CONTRACT DOES NOT PROVIDE ANY  PATENT,  COPYRIGHT,
           OR  TRADEMARK  PROTECTION  FOR  YOUR IDEA OR INVENTION.   YOU ARE
           ENCOURAGED TO CONSULT WITH A QUALIFIED  ATTORNEY  BEFORE  SIGNING
           THIS  CONTRACT.   BY PROCEEDING WITHOUT THE ADVICE OF A QUALIFIED
           ATTORNEY, YOU COULD LOSE ANY RIGHTS YOU MIGHT HAVE IN  YOUR  IDEA
           OR INVENTION.
                     (2)  The  invention  developer shall complete the cover
           sheet with the proper information to be provided in  the  blanks.
           The  invention developer shall insert in the first blank the date
           the invention developer began  business  or  September  6,  1991,
           whichever  is later.   The numbers to be inserted in the last two
           blanks may be rounded to the nearest one hundred and do not  need
           to include those who have contracted within the three immediately
           preceding  calendar months or parts thereof.  If the number to be
           inserted in the third blank is zero, it shall be so stated.
                     (3) The cover sheet shall only contain the  information
           required  by  this  section and the name, primary office address,
           and local office address of the invention developer.





 CONTRACT  FOR  INVENTION  DEVELOPMENT  SERVICES;  WRITTEN REPORT;
          CONTENTS.
                87-605.  With respect to every contract  for  invention
           development  services,  the  invention developer shall deliver to
           the customer at the address specified in the contract,  at  least
           at  quarterly  intervals  throughout  the term of the contract, a
           written report which identifies the contract and which includes:
                     (1) A full,  clear,  and  concise  description  of  the
           services  performed  up  to  the  date  of  the report and of the
           services yet to be performed; and
                     (2) The name and address  of  each  and  every  person,
           firm,  or  corporation to whom the subject matter of the contract
           has been disclosed, the reason for each and every disclosure, the
           nature of the disclosure, and copies of all responses received as
           a result of those disclosures.

 CONTRACT FOR INVENTION DEVELOPMENT SERVICES; CONTENTS.
                87-606.    Every  contract  for  invention  development
           services shall set forth in boldface of at least  ten-point  type
           the following:
                     (1)  The  terms  and conditions of payment and contract
           termination rights required by section 87-603;
                     (2) A full,  clear,  and  concise  description  of  the
           specific acts or services that the invention developer undertakes
           to  perform for the customer.  To the extent that the description
           of the specific  acts  or  services  affords  discretion  in  the
           invention  developer as to what specific acts or services will be
           performed, the invention developer shall be deemed a fiduciary;
                     (3) A statement as to whether the  invention  developer
           undertakes   to  construct,  sell,  or  distribute  one  or  more
           prototypes,  models,  or   devices   embodying   the   customer's
           invention;
                     (4)  The  name  and  principal place of business of the
           invention developer and the name and principal place of  business
           of  any parent, subsidiary, or affiliated company that may engage
           in performing any of the invention development services;
                     (5) If any oral or written representation of  estimated
           or   projected  customer  earnings  is  given  by  the  invention
           developer, a statement of that estimation  or  projection  and  a
           description of the data upon which it is based;
                     (6)  The  name  and  address  of  the  custodian of all
           records  and   correspondence   pertaining   to   the   invention
           development services and a statement 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 of not less than two years after expiration
           of  the  term of the contract for invention development services,
           which records and correspondence shall be made available  to  the
           customer  or  his or her representative for review and copying at
           the customer's reasonable expense on the invention
           developer's premises during  normal  business  hours  upon  seven
           days' written notice; and
                     (7)  A  statement  setting  forth  a  time schedule for
           performance of the invention development services,  including  an
           estimated  date by which performance of the invention development
           services is expected to be completed.





 CONTRACT  FOR  INVENTION  DEVELOPMENT  SERVICES;  VOIDABLE; WHEN;
          CIVIL ACTION AUTHORIZED; ADDITIONAL AMOUNT DISTRIBUTED TO  COMMON
          SCHOOLS; WHEN; REBUTTABLE PRESUMPTION.
                87-607.    (1)  Any  contract for invention development
           services which does not substantially comply with  the  Invention
           Development  Services  Disclosure  Act  shall  be voidable at the
           option of the customer.  Any contract for  invention  development
           services  entered into in reliance upon any false, fraudulent, or
           misleading information, representation, notice, or  advertisement
           of the invention developer shall be voidable at the option of the
           customer.  Any waiver by the customer of any of the provisions of
           the  act  shall  be deemed contrary to public policy and shall be
           void and unenforceable.
                     (2) Any customer who has been injured by a violation of
           the 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  the  disclosures  required by the act may recover in a
           civil action against the  invention  developer,  in  addition  to
           reasonable  costs  and  attorney's  fees,  the  amount  of actual
           damages sustained by the customer.
                     (3) If a  customer  establishes  a  claim  and  secures
           judgment  on  such claim under subsection (2) of this section, an
           amount up to two times the judgment may  be  recovered  from  the
           invention  developer,  if  ordered  by  the  court.    Any amount
           recovered pursuant to this subsection shall be placed in  a  fund
           to be distributed to the common schools of this state.
                     (4) A substantial violation of any provision of the act
           by  an  invention developer or the execution by the customer of a
           contract for invention development services in  reliance  on  any
           such false or fraudulent statements, representations, or material
           omissions shall establish a rebuttable presumption of injury.





 ATTORNEY GENERAL; ENFORCEMENT DUTIES; CIVIL PENALTY.
                87-608.    (1)  For purposes of enforcing the Invention
           Development Services Disclosure Act,  the  Attorney  General  may
           conduct  investigations, hold hearings, and compel the attendance
           of witnesses and the production of accounts, books, and documents
           by the issuance of subpoenas.
                     (2) The Attorney General shall enforce the act and  may
           recover  a civil penalty not to exceed three thousand dollars for
           each violation of the act and seek equitable relief  to  restrain
           any violation.





 INVENTION DEVELOPER; BOND; FILINGS REQUIRED; FEES.
                87-609.    (1)  Every  invention developer rendering or
           offering to render invention development services in  this  state
           shall  maintain  a  bond  issued  by  a  surety company holding a
           certificate of authority to transact business in this state,  the
           principal  sum  of  which  shall  not  be  less  than twenty-five
           thousand  dollars  in  the  first  or  any  subsequent  year   of
           operation.  The invention developer shall file a copy of the bond
           with  the  Secretary  of  State  prior  to the time the invention
           developer first commences business in this state or within ninety
           days after September 6, 1991, whichever is later, and  shall  pay
           an  initial  filing  fee  of one hundred dollars.   The invention
           developer shall file an annual statement that the bond is current
           and shall pay a filing fee of twenty-five dollars  on  or  before
           July 1 of each year after the initial filing.
                     (2) The bond shall be in favor of the State of Nebraska
           for the benefit of any person who, after entering into a contract
           for  invention  development services with an invention developer,
           is injured by  fraud,  dishonesty,  or  failure  to  provide  the
           services  of  the  invention  developer  in  performance  of  the
           contract.  Any person claiming against the bond may  maintain  an
           action  at  law  against  the invention developer and the surety.
           The aggregate liability of the surety  to  all  persons  for  all
           breaches of conditions of the bond shall not exceed the amount of
           the bond.





 REMEDIES; NOT EXCLUSIVE.
                87-610.   Nothing in the Invention Development Services
           Disclosure Act shall limit any obligations, rights,  or  remedies
           that  might otherwise be applicable or available under the law of
           this state.


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