TribLIVE

| Business

 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

O'Hara invention promoter, FTC settle case for $10.7 million

Email Newsletters

Click here to sign up for one of our email newsletters.

On the Grid

From the shale fields to the cooling towers, Trib Total Media covers the energy industry in Western Pennsylvania and beyond. For the latest news and views on gas, coal, electricity and more, check out On the Grid today.

Daily Photo Galleries

'American Coyotes' Series

Traveling by Jeep, boat and foot, Tribune-Review investigative reporter Carl Prine and photojournalist Justin Merriman covered nearly 2,000 miles over two months along the border with Mexico to report on coyotes — the human traffickers who bring illegal immigrants into the United States. Most are Americans working for money and/or drugs. This series reports how their operations have a major impact on life for residents and the environment along the border — and beyond.

Monday, July 14, 2008
 

Novice inventors who say they paid thousands of dollars to an O'Hara company that dazzled them with talk of marketing their gadgets and delivered little in the end finally stand to recoup part of their money -- though it may be less than expected.

U.S. District Judge Gary L. Lancaster signed an order approving a settlement that ends 11 years of litigation between the Federal Trade Commission and Davison & Associates Inc.

Under the final terms, the invention promoter will pay $10.7 million in cash, real estate and investment assets to the FTC to settle the case.

The FTC claims the company misrepresented its services and rate of success in growing clients' ideas into actual products for sale.

The $10.7 million represents less than half Lancaster's original judgment against Davison. In a March 17, 2006, decision, he ordered Davison to repay $26 million to clients it represented going back to 1989, when CEO George M. Davison founded the company.

John Mendenhall, regional director of the FTC's Cleveland office, which handled the case, said this morning that while the money available "will not cover all the injury from the case, it will be fairly significant." The FTC now will "identify victims" of the company in order to distribute the money, he said.

The FTC's case against Davison had been among its "Project Mousetrap" actions against invention promoters, but unlike most of the cases it wasn't settled out of court. A three-week trial was held in 2005.

Davison noted in a statement this morning that it opted to settle the dispute, rather than continue to pursue an appeal of Lancaster's decision.

The company noted it has added risk disclosure statements to its marketing material to emphasize that "new product design is a high-risk venture." Lancaster earlier specified cautions for Davison to use in documents it sends to potential clients.

Subscribe today! Click here for our subscription offers.

 

 


Show commenting policy

Most-Read Business