Current as of March, 2015

FEDERAL AND CALIFORNIA STATE

STATUTES RELATING TO
INVENTION PROMOTION COMPANIES

Unites States Code

Title 35 Part III Chapter 29
Section 297 - Improper and deceptive invention promotion
(a) In General. An invention promoter shall have a duty to disclose the following information to a
customer in writing, prior to entering into a contract for invention promotion services:
(1) the total number of inventions evaluated by the invention promoter for commercial
potential in the past 5 years, as well as the number of those inventions that received positive
evaluations, and the number of those inventions that received negative evaluations;
(2) the total number of customers who have contracted with the invention promoter in the past
5 years, not including customers who have purchased trade show services, research, advertising, or
other nonmarketing services from the invention promoter, or who have defaulted in their payment to
the invention promoter;
(3) the total number of customers known by the invention promoter to have received a net
financial profit as a direct result of the invention promotion services provided by such invention
promoter;
(4) the total number of customers known by the invention promoter to have received license
agreements for their inventions as a direct result of the invention promotion services provided by such
invention promoter; and
(5) the names and addresses of all previous invention promotion companies with which the
invention promoter or its officers have collectively or individually been affiliated in the previous 10
years.
(b) Civil Action.
(1) Any customer who enters into a contract with an invention promoter and who is found by a
court to have been injured by any material false or fraudulent statement or representation, or any
omission of material fact, by that invention promoter (or any agent, employee, director, officer, partner,
or independent contractor of such invention promoter), or by the failure of that invention promoter to
disclose such information as required under subsection (a), may recover in a civil action against the
invention promoter (or the officers, directors, or partners of such invention promoter), in addition to
reasonable costs and attorneys fees
(A) the amount of actual damages incurred by the customer; or
(B) at the election of the customer at any time before final judgment is rendered,
statutory damages in a sum of not more than $5,000, as the court considers just.
(2) Notwithstanding paragraph (1), in a case where the customer sustains the burden of proof,
and the court finds, that the invention promoter intentionally misrepresented or omitted a material fact
to such customer, or willfully failed to disclose such information as required under subsection (a), with
the purpose of deceiving that customer, the court may increase damages to not more than three times
the amount awarded, taking into account past complaints made against the invention promoter that
resulted in regulatory sanctions or other corrective actions based on those records compiled by the
Commissioner of Patents under subsection (d).

Current as of March, 2015

(c) Definitions. For purposes of this section

(1) a contract for invention promotion services means a contract by which an invention
promoter undertakes invention promotion services for a customer;
(2) a customer is any individual who enters into a contract with an invention promoter for
invention promotion services;
(3) the term invention promoter means any person, firm, partnership, corporation, or other
entity who offers to perform or performs invention promotion services for, or on behalf of, a customer,
and who holds itself out through advertising in any mass media as providing such services, but does not
include
(A) any department or agency of the Federal Government or of a State or local
government;
(B) any nonprofit, charitable, scientific, or educational organization, qualified under
applicable State law or described under section 170(b)(1)(A) of the Internal Revenue
Code of 1986;
(C) any person or entity involved in the evaluation to determine commercial potential
of, or offering to license or sell, a utility patent or a previously filed nonprovisional utility
patent application;
(D) any party participating in a transaction involving the sale of the stock or assets of a
business; or
(E) any party who directly engages in the business of retail sales of products or the
distribution of products; and
(4) the term invention promotion services means the procurement or attempted procurement
for a customer of a firm, corporation, or other entity to develop and market products or services that
include the invention of the customer.
(d) Records of Complaints.
(1) Release of complaints. The Commissioner of Patents shall make all complaints received by
the Patent and Trademark Office involving invention promoters publicly available, together with any
response of the invention promoters. The Commissioner of Patents shall notify the invention promoter
of a complaint and provide a reasonable opportunity to reply prior to making such complaint publicly
available.
(2) Request for complaints. The Commissioner of Patents may request complaints relating to
invention promotion services from any Federal or State agency and include such complaints in the
records maintained under paragraph (1), together with any response of the invention promoters.
[ Note: See the Patent Office fraud prevention webpage at
http://www.uspto.gov/patents-getting-started/using-legal-services/scam-prevention ]

Current as of March, 2015

CALIFORNIA BUSINESS AND PROFESSIONS CODE

DIVISION 8. SPECIAL BUSINESS REGULATIONS [18400 - 22948.7]
CHAPTER 17. Invention Development Services Contracts [22370 - 22395]
ARTICLE 1. General Provisions [22370 - 22371]
22370
(a) The Legislature finds
that there are in the State of California members of the general public who have ideas or
inventions that they believe have substantial commercial value but which members of the
general public do not have the resources or expertise necessary to develop, manufacture or
market these ideas or inventions;
that these members of the general public are commonly referred to as inventors;
that these inventors are generally not people who earn their livelihood from developing,
manufacturing, promoting or marketing ideas or inventions, from manufacturing or marketing
products, from publishing literary works or from owning, operating or controlling commercial
enterprises;
that [there] is a significant number of persons who have realized that inventors are willing to
expend substantial sums for services represented to result in the development, manufacture,
promotion, sale or general exploitation of the commercial value of their ideas or inventions;
that these persons are frequently known as invention developers;
that the invention developers services are generally offered for sums ranging from $500 to
$5,000 plus either a percentage of the income that may be derived from the sale or marketing
of the idea or invention or a partial ownership interest in the idea or invention;
that the inventors generally have a very passive role in the development, promotion,
manufacture or sale of their ideas or inventions after the contract with the invention developer
is executed, usually doing little more than receiving periodic reports from the invention
developer;
that an extremely small number of inventors to whom these invention developers offer their
services ever have their products sold or marketed;
that there exists in connection with invention development services, sales practices and
business methods which have worked a fraud, deceit, imposition, and financial hardship upon
many people of this state;
that existing legal protection to consumers is inadequate to prevent these abuses;
that the invention development industry has a significant impact upon the economy and wellbeing of this state and its local communities; and
that the provisions of this chapter relating to such services are necessary for the public welfare.
(b) The Legislature declares that the purpose of this chapter is to safeguard the public against fraud,
deceit, imposition, and financial hardship, and to foster and encourage competition, fair dealing, and
prosperity in the field of invention development services by prohibiting or restricting false or misleading
advertising, onerous contract terms, harmful financial practices, and other unfair, dishonest, deceptive,
destructive, unscrupulous, fraudulent, and discriminatory practices by which the public has been injured
in connection with invention development services but not to interfere with, or further regulate by this
chapter, those persons who provide researching, marketing, surveying, or other kinds of consulting
services to professional manufacturers, marketers, publishers or others purchasing such services as an
adjunct to the traditional commercial enterprises in which they engage as a livelihood.
3

Current as of March, 2015

22371
As used in this chapter, the following words have the following meanings:
(a) Contract for invention development services shall include a contract by which an invention
developer undertakes to develop or promote an invention for a customer.
(b) Customer shall include any person, firm, corporation, or other entity that is solicited by, inquires
about or seeks the services of, or enters into a contract for invention development services with an
invention developer, except (1) any department or agency of the federal, state, or local government, (2)
any charitable, scientific, educational, religious, or other organization qualified under Section 501(c)(3)
or described in Section 170(b)(1)(a) of the Internal Revenue Code of 1954, as amended, and (3) any
person, firm, corporation, or other entity regularly engaged in a trade, business, or profession which has
either a net worth of one hundred thousand dollars ($100,000) or more or gross receipts from any
source of fifty thousand dollars ($50,000) or more during the calendar year in which any contract for
invention development services is signed.
(c) Invention shall mean (1) an invention, (2) an idea, (3) a concept, or (4) any combination thereof.
(d) Invention developer shall mean any person, firm, corporation, or association, and the agents,
employees, or representatives of such person, firm, corporation, or association that develops or
promotes or offers to develop or promote an invention, except (1) any department or agency of the
federal, state, or local government, (2) any charitable, scientific, educational, religious, or other
organization qualified under Section 501(c)(3) or described in Section 170(b)(1)(a) of the Internal
Revenue of Code 1954, as amended, (3) any person, firm, corporation, association, or other entity
whose gross receipts from contracts for invention development services, as defined in subdivision (a) of
Section 22371, do not exceed 10 percent of its gross receipts from all sources during the fiscal year
preceding the year in which any contract for invention development services is signed, or (4) any person,
firm, corporation, association or other entity that does not charge a fee for invention development
services. For the purposes of this paragraph, fee shall include any payment made by the customer to
such entity including reimbursements for expenditures made or costs incurred by such entity but shall
not include any payment made from a portion of the income received by a customer by virtue of
invention development services performed by such entity.
(e) Invention development services shall include acts required or promised to be performed, or
actually performed, or both, by an invention developer for a customer.
ARTICLE 2. General Regulatory Provisions [22372 - 22378]
22372
(a) Every contract for invention development services shall be in writing and shall be subject to the
provisions of this chapter. A copy of the written contract shall be given to the customer at the time he
signs the contract.
(b) If one or more subsequent contracts are contemplated by the invention developer in connection
with an invention, or if the invention developer contemplates performance of 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 a writing and shall supply to the
customer such writing together with a copy of such contract or a written summary of the general terms
of each and every such subsequent contract, including the amount of any fees or other consideration
4

Current as of March, 2015

required from the customer, at the time the customer signs the first contract.
22373
(a) Notwithstanding any contractual provision to the contrary, the invention developer and the
customer shall each have the right to cancel a contract for invention development services for any
reason at any time within seven days of the date the invention developer and the customer sign the
contract. Cancellation shall be effected by written notice mailed or delivered to the invention developer
or the customer. If said notice is mailed, it must be postmarked by midnight of the last day of the
cancellation period. If the notice is delivered, it must be delivered by the end of the invention
developers normal business day. Within five business days after receipt of such notice of cancellation by
the customer, the invention developer shall return to the customer, by mail, all moneys paid and all
materials provided by the customer.
(b) The provisions of subdivision (a) shall apply to every contract executed between an invention
developer and a customer. Each such contract shall contain the following statement in 10-point boldface
type immediately above the place at which the customer signs the contract:
The seven-day period during which you may cancel this contract for any reason by
mailing or delivering written notice to the invention developer will expire on (Last
date to mail or deliver notice). If you choose to mail your notice, it must be placed in
the United States mail properly addressed first-class postage prepaid and
postmarked before midnight of this date. If you choose to deliver your notice to the
invention developer directly, it must be delivered to him by the end of his normal
business day on this date. The invention developer also has the right to cancel this
contract by notice similarly mailed or delivered.
22374
Each and every contract for invention development services shall carry a distinctive and conspicuous
cover sheet with the following notice (and no other) imprinted thereon in boldface type of not less than
10-point size:
The following disclosures are required by law:
You have the right to cancel this contract for any reason at any time within seven days from the date
you and the invention developer sign the contract and you receive a fully executed copy of it. To
exercise this option you need only mail or deliver to this invention developer written notice of your
cancellation. The method and time for notification is set forth in this contract immediately above the
place for your signature. Upon cancellation, the invention developer must return by mail, within five
business days, all money paid and all materials provided by you.
Your potential patent rights may be adversely affected by any attempt to commercialize your idea or
invention before a patent application covering it is filed. Nonconfidential disclosures of your idea or
invention may also trigger certain statutory deadlines for filing a patent application in the United States
and would prevent you from obtaining valid patent rights in countries whose law provides that patent
applications must be filed before there is a public disclosure.
This contract between you and the invention developer is regulated by law. The invention developer is
not qualified or permitted to advise you whether protection of your idea or invention is available under
the patent, copyright or trademark laws of the United States or any other law. This contract does not
provide any patent, copyright or trademark protection for your idea or invention. If your idea or
invention is patentable, copyrightable or subject to trademark protection, or infringes an existing valid
patent, copyright or trademark or a patent, copyright or trademark for which application has been
made, your failure to inquire into these matters may affect your rights to your idea or invention.
5

Current as of March, 2015

22375
No invention developer shall acquire any interest, partial or whole, in the title to the customers
invention, unless the invention developer contracts to manufacture the invention and acquires such
interest for such purpose at or about the time the contract for manufacture is executed. Nothing in this
section shall be construed to prohibit an invention developer from contracting with a customer to
receive a portion of any proceeds accruing to the customer as a result of performance of invention
development services by the invention developer.
22376
No contract for invention development services shall require or entail the execution of any note or
series of notes by the customer which, when separately negotiated, will cut off as to third parties any
right of action or defense which the customer may have against the invention developer.
22377
Any assignee of the invention developers rights is subject to all equities and defenses of the customer
against the invention developer existing in favor of the customer at the time of the assignment.
22378
With respect to each and every contract for invention development services, the invention developer
shall deliver to the customer, at the address specified in the contract at quarterly intervals throughout
the term of the contract, a written statement of the services performed to date; provided, however, the
first such statement need not be delivered until 180 days after the contract is executed.
ARTICLE 3. Mandatory Contract Terms [22379- 22379.]
22379
Every contract for invention development services shall set forth in at least 10-point boldface type, or
equivalent size if handwritten, all of the following:
(a) The terms and conditions of payment required by Section 22373.
(b) A full and detailed description of the acts or services that the invention developer undertakes to
perform for the customer. To the extent that the description of acts or services affords the invention
developer discretion to decide what acts or services are to be performed by the invention developer,
the invention developer shall exercise that discretion to promote the best interests of the customer.
(c) A statement whether the invention developer undertakes to construct one or more prototypes,
models, or devices embodying the customers invention.
(d) A statement whether the invention developer undertakes to sell or distribute one or more
prototypes, models, or devices embodying the customers invention.
(e) The name of the person or firm contracting to perform the invention development services, the
name under which said person or firm is doing or has done business as an invention developer, and the
name of any parent, subsidiary or affiliated company that may engage in performing the invention
development services.
(f) The invention developers principal business address and the name and address of its agent in the
State of California authorized to receive service of process.
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Current as of March, 2015

(g) The business form of the invention developer, whether corporate, partnership, or otherwise.
(h) A statement of the fee charged, a statement that a portion of the fee charged will be paid as a
commission or other similar payment, if in fact it is intended to be so paid, to a person inducing, directly
or indirectly, a customer to contract for the services of the invention developer, which statement shall
specify the names of the person or persons receiving said payment; and a statement of the approximate
portion of the fee charged, if any, that will be expended for services relating to patent matters.
(i) A statement that the invention developer does not intend to expend more for the invention
development services than the fee charged the customer, if, in fact, it does not, and if it does, a
statement of the estimated expenditures of the invention developer in excess of the fee received from
the customer.
(j) If any oral or written representation of estimated or projected customer earnings is made, a
statement of such estimation or projection and the data upon which it is based.
(k) A single statement setting forth both (1) the total number of customers who have contracted with
the invention developer provided, however, that the number need not reflect those customers who
have contracted within the last 30 days, and (2) the number of customers that have received, by virtue
of the invention developers performance of invention development services, an amount of money in
excess of the amount of money paid by such customers to the invention developer.
(l) 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 not less
than three years after expiration of the term of the contract for invention development services.
(m) The name and address of the custodian of all records and correspondence relating to the
performance of the invention development services.
(n) A statement that the records and correspondence required to be maintained by subdivision (m)
above will be made available to the customer or his representative for review and copying at the
customers expense on the invention developers premises during normal business hours upon seven
days written notice, said time period to begin from the date the notice is placed in the United States
mail properly addressed first-class postage prepaid.
(o) A statement of the expected date of completion of the invention development services.
(p) A statement as follows:
Your potential patent rights may be adversely affected by any attempt to commercialize your idea or
invention before a patent application covering it is filed. Nonconfidential disclosures of your idea or
invention may also trigger certain statutory deadlines for filing a patent application in the United States
and would prevent you from obtaining valid patent rights in countries whose law provides that patent
applications must be filed before there is a public disclosure.
This contract between you and the invention developer is regulated by law. The invention developer is
not qualified or permitted to advise you whether protection of your idea or invention is available under
the patent, copyright or trademark laws of the United States or any other law. This contract does not
provide any patent, copyright or trademark protection for your idea or invention. If your idea or
invention is patentable, copyrightable or subject to trademark protection, or infringes an existing valid
7

Current as of March, 2015

patent, copyright or trademark or a patent, copyright or trademark for which application has been
made, your failure to inquire into these matters may affect your rights to your idea or invention.
ARTICLE 4. Disclosures Made Prior to Contract [22380 - 22381]
22380
Every invention developer who charges a fee or requires any consideration for his invention
development services must clearly and conspicuously disclose such fact in every advertisement of such
services.
22381
In the first oral communication with a customer or in the first written response to an inquiry by a
customer other than an oral communication or written response, the primary purpose of which is to
arrange an appointment with the invention developer for presentation of his or her invention
development services, the invention developer shall cause the following written disclosures to be made
and given to each customer at the time of the disclosure:
(a) A statement of the fee charged, if known, or a statement of the approximate range of fees charged; a
statement that a portion of the fee charged will be paid as a commission or other similar payment, if in
fact it is intended to be so paid, to a person inducing, directly or indirectly, a customer to contract for
the services of the invention developer; and a statement of the approximate portion of the fee charged,
if any, that will be expended for services relating to patent matters.
(b) A statement that the invention developer does not intend to expend more for the invention
development services than the fee charged the customer, if, in fact, it does not, and if it does, a
statement of the estimated expenditures of the invention developer in excess of the fee received from
the customer.
(c) A single statement setting forth both (1) the total number of customers who have contracted with
the invention developer; however, the number need not reflect those customers who have contracted
within the last 30 days; and (2) the number of customers that have received by virtue of the invention
developers performance of invention development services an amount of money in excess of the
amount of money paid by those customers to the invention developer.
(d) A statement as follows:
Your potential patent rights may be adversely affected by any attempt to commercialize your idea or
invention before a patent application covering it is filed. Nonconfidential disclosures of your idea or
invention may also trigger certain statutory deadlines for filing a patent application in the United States
and would prevent you from obtaining valid patent rights in countries whose law provides that patent
applications must be filed before there is a public disclosure. Any contract for invention development
services between you and our firm will be regulated by law. Our firm is not qualified or permitted to
advise you whether protection of your idea or invention is available under the patent, copyright or
trademark laws of the United States or any other law. The contract does not provide any patent,
copyright or trademark protection for your idea or invention. If your idea or invention is patentable,
copyrightable or subject to trademark protection, or infringes an existing valid patent, copyright or
trademark or a patent, copyright or trademark for which application has been made, your failure to
inquire into these matters may affect your rights to your idea or invention.
ARTICLE 4.5. Remedies and Enforcement [22382 - 22388]
8

Current as of March, 2015

22382
The provisions of this chapter are not exclusive and do not relieve the parties or the contract subject
thereto from compliance with all other applicable provisions of law.
22383
Any contract for invention development services which does not comply with the applicable provisions
of this chapter shall be void and unenforceable as contrary to public policy, provided that no contract
shall be void and unenforceable if the invention developer proves that noncompliance was
unintentional and resulted from a bona fide error notwithstanding the use of reasonable procedures
adopted to avoid any such errors and makes an appropriate correction.
22384
Any contract for invention development services entered into in reliance upon any willful and false,
fraudulent, or misleading representation by the invention developer shall be void and unenforceable.
22385
Any waiver by the customer of the provisions of this chapter shall be deemed contrary to public policy
and shall be void and unenforceable.
22386
Any person who has been injured by a violation of this chapter by an invention developer, or 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 Section 22379, may bring a
civil action against the invention developer for the greater of the following amounts:
(1) Three thousand dollars ($3,000).
(2) Three times the amount of the actual damages, if any, sustained by the plaintiff.
In addition to the greater of the preceding amounts, the court may award reasonable attorneys fees to
the plaintiff.
22387
Any invention developer who willfully violates any provision of this chapter, or willfully enters an
invention development contract which omits any duty or disclosure required by this chapter, is guilty of
a misdemeanor. Any superior court of this state shall have jurisdiction in equity to restrain and enjoin
the violation of any of the provisions of this chapter relating to invention development services and
contracts therefor.
The duty to institute actions for violation of such provisions of this chapter, including equity proceedings
to restrain and enjoin such violations, is hereby vested in the Attorney General, district attorneys,
county counsels, and city attorneys. The Attorney General, any district attorney, or city attorney may
prosecute misdemeanor actions or institute equity proceedings or both.
This section shall not be deemed to prohibit the enforcement by any person of any right provided by this
or any other law.
22388
Failure to make the disclosure required by Article 4 (commencing with Section 22380) shall render any
contract subsequently entered into between the customer and the invention developer voidable by the
customer.
ARTICLE 5. Financial Requirements [22389 - 22391.1]
9

Current as of March, 2015

22389
Every invention developer rendering or offering to render invention development services in this state
shall maintain a bond issued by a surety company admitted to do business in this state. The principal
sum of the bond shall be 5 percent of the invention developers gross income from the invention
development business in this state during the invention developers last fiscal year, except that the
principal sum of the bond shall not be less than twenty-five thousand dollars ($25,000) in the first or any
subsequent year of operations. A copy of such bond shall be filed with the Secretary of State prior to the
time the invention developer first commences business in this state. The invention developer shall have
90 days after the end of each fiscal year within which to change the bond as may be necessary to
conform to the requirements of this section.
22390
The bond required by Section 22389 shall be in favor of the State of California for the benefit of any
person who, after entering into a contract for invention development services with an invention
developer is damaged by fraud or dishonesty or failure to provide the services of the invention
developer in performance of the contract.
22391
(a) When a deposit has been made in lieu of a bond pursuant to Section 995.710 of the Code of Civil
Procedure, the person asserting a claim against the deposit shall, in lieu of Section 996.430 of the Code
of Civil Procedure, establish the claim by furnishing evidence to the Secretary of State of a money
judgment entered by a court together with evidence that the claimant is a person described in Section
22390.
(b) When a person has established the claim with the Secretary of State, the Secretary of State shall
review and approve the claim and enter the date of approval thereon. The claim shall be designated an
approved claim.
(c) When the first claim against a particular deposit account has been approved, it shall not be paid until
the expiration of a period of 240 days after the date of its approval by the Secretary of State.
Subsequent claims that are approved by the Secretary of State within the same 240-day period shall
similarly not be paid until the expiration of the 240-day period. Upon the expiration of the 240-day
period, the Secretary of State shall pay all approved claims from that 240-day period in full unless the
deposit is insufficient, in which case each approved claim shall be paid a pro rata share of the deposit.
(d) When the Secretary of State approves the first claim against a particular deposit account after the
expiration of a 240-day period, the date of approval of that claim shall begin a new 240-day period to
which subdivision (c) shall apply with respect to the amount remaining in the deposit account.
(e) After a deposit account is exhausted, no further claims shall be paid by the Secretary of State.
Claimants who have had their claims paid in full or in part pursuant to subdivisions (c) and (d) shall not
be required to return funds received from the deposit for the benefit of other claimants.
(f) When a deposit has been made in lieu of a bond, the amount of the deposit shall not be subject to
attachment, garnishment, or execution with respect to an action or judgment against the invention
developer, other than as to an amount no longer needed or required for the purpose of this chapter
which would otherwise be returned to the invention developer by the Secretary of State.

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Current as of March, 2015

(g) The Secretary of State shall retain a cash deposit for two years from the date the Secretary of State
receives written notification from the assignor of the deposit that the assignor has ceased to engage in
the business of an invention developer or has filed a bond pursuant to Section 22389, provided that
there are no outstanding claims against the deposit. The written notice shall include all of the following:
(1) name, address, and telephone number of the assignor; (2) name, address, and telephone number of
the bank at which the deposit is located; (3) account number of the deposit; and (4) a statement
whether the assignor is ceasing to engage in the business of an invention developer or has filed a bond
with the Secretary of State. The Secretary of State shall forward an acknowledgment of receipt of the
written notification to the assignor at the address indicated therein, specifying the date of receipt of the
written notice and anticipated date of release of the deposit.
(h) This section shall apply to all deposits retained by the Secretary of State.
(i) A judge of a superior court may order the return of the deposit prior to the expiration of two years
upon evidence satisfactory to the judge that there are no outstanding claims against the deposit or
order the Secretary of State to retain the deposit for a sufficient period beyond the two years specified
in subdivision (g) to resolve outstanding claims against the deposit.
22391.1
(a) The Secretary of State shall enforce the provisions of this title that govern the filing and maintenance
of bonds and deposits in lieu of bonds.
(b) The Secretary of State shall charge and collect a filing fee not to exceed the cost of filing the bond or
the deposit in lieu of a bond pursuant to Section 995.710 of the Code of Civil Procedure.
ARTICLE 6. Miscellaneous Provisions [22392 - 22395]
22392
Every invention developer shall maintain all records and correspondence relating to performance of
each invention development service contract for a period of not less than three years after expiration of
the term of each such contract.
22393
No invention developer shall make, or authorize the making of, any reference to compliance by it with
this act in any advertisement.
22394
If any provision of this act or the application thereof to any person or circumstances is held
unconstitutional, the remainder of the chapter and the application of such provision to other persons
and circumstances shall not be affected thereby.
22395
An invention developer shall maintain as confidential all disclosures made to it by a customer seeking
invention development services, except:
(a) Information which at the time of disclosure is in the public domain.
(b) Information which, after disclosure, becomes part of the public domain by publication or otherwise,
independently of any act or omission by the invention developer.
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Current as of March, 2015

(c) Information which the invention developer can establish by competent proof was in its possession at
the time of disclosure by the customer, and was not acquired, directly or indirectly, from the customer.
(d) Information which the invention developer receives from a third party; provided, however, that such
information was not obtained in confidence by said third party, directly or indirectly, from the customer.
This duty of confidentiality includes the taking of reasonable steps by the invention developer to prevent
disclosure of confidential information to third parties. This confidential relationship cannot be waived by
a customer without an express written waiver by the customer of the invention developers obligation
of confidentiality, and no waiver shall be entered into until after the disclosures described in Section
22381 have been made.

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