When evaluating the character of a man, H.L. Mencken offered the following advice: “Simply tell me how he makes his living. It is the safest and surest of all known tests. A man who gets his board and lodging on this ball in an ignominious way is inevitably an ignominious man.”
The new Acting Attorney General, Matthew Whitaker, would certainly qualify as an ignominious man under the Bard of Baltimore’s definition. In 2017, the Federal Trade Commission (FTC) shuttered World Patent Marketing, a sham corporation that took money from inventors eager to patent and market their ideas that Whitaker was on the board of:
World Patent Marketing [WPM] collected almost $26 million by promising starry-eyed inventors it would turn their inventions into best sellers. Company reps claimed invention ideas were reviewed by an illustrious board that included big names such as Whitaker, Republican Congressman Brian Mast, and time-travel scientist [yes, you read that correctly] Ronald Mallett. (A Mast spokesman denied that the congressman was on the board and said he never accepted compensation, though he did take a campaign contribution he later returned.)…
At least a few board members simply took cash without meeting inventors or reviewing pitches. Some of the supposed innovations the company green-lit already existed, so patent applications were regularly denied. And despite the many supposed success stories listed on its website, virtually none of the firm’s clients ever made money. Once customers paid, World Patent Marketing provided little of what was promised. And when customers complained or warned that they would write negative reviews, [WPM CEO Scott] Cooper unleashed wild threats, sometimes mentioning Krav Maga-trained security.
WPM’s business model (well, its “official” one) was to to review innovators’ inventions with the intention of getting them patented and marketed. Of course, none of that happened: the board members, Whitaker included, just took the money and ran. The FTC estimates that investors lost up to $400,000 each, with many losing their life savings.
Meanwhile, WPM and Whitaker himself threatened extensive legal action against customers who had the audacity to demand their money back when they wised up to the scam.
There will always be con men out there who would rather bilk hard-working folks than make a living in a line of work that doesn’t secure them a spot in the Eighth Circle of Hell, but our current IP regime is in part responsible for making this con possible.
The belief that inventors need to patent their inventions is marketed to small-time inventors as the only way to secure their idea (any insomniacs reading have likely seen an advertisement for InventHelp or some similar firm on late-night television), but this isn’t quite the case.
A great many innovators choose not to patent because the process is time-consuming and ineffective relative to other means of securing the rents that come from being the first to innovate, like simply keeping the innovation secret.
Additionally, by feeding into the mindset that a patent is the end-all-be-all for innovators, WPM wound up taking money from people with inventions that were either low-quality or already existed.
This scandal piles on to Whitaker’s shady past and serves as a reminder that policies designed to protect innovators can also enable scammers such as those made wealthy by WPM.