NATIONAL INVENTOR
FRAUD CENTER
www.inventorfraud.com
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.