General Information

The bond required must be in favor of the State of North Carolina for the benefit of any person who, after entering into a contract for invention development services with an invention developer is damaged by fraud, dishonesty, or failure to provide services of the invention developer in performance of the contract.

If an Invention Developer fails to comply with the requirements of mandatory disclosure and contracting in N.C.G.S. 66-209 at seq., then their client may be able to utilize specific statutory civil remedies, including treble damages and attorney's fees. In addition, in the event that an apparent violation is discovered by the North Carolina Secretary of State, a case referral will be made to the North Carolina Attorney General which is empowered to obtain injunctive relief and also to recover a civil penalty up to $25,000.00.

The general rule is that one who "an individual, firm, partnership, or corporation, or an agent, employee, officer, partner, or independent contractor of one of those entities that offers to perform or performs Invention development services for a customer." However, please note the following categories of persons for purposes of this law are NOT included in this general rule:

a. A department or agency of the federal, State, or local government; b. A charitable, scientific, educational, religious, or other organization qualified under G.S. 105 130.9 or described in Section 170(b)(1)(A) of the Internal Revenue Code of 1986, as amended; (Internal Revenue Charities Search)https://www.irs.gov/charities-non-profits/search-for-charities)
c. A person registered before the United States Patent and Trademark Office acting solely within the scope of that person's professional license:(U.S. Patent and Trademark Patent Customer Services) https://www.uspto.gov/about-us/organizational-offices/office-commissioner-patents/office-deputy-commissioner-patent-administration/office-innovation-development d. A person, firm, corporation, association, or other entity that does not charge a fee, including reimbursement for expenditures made or costs incurred by the entity, for invention development services other than payment made from a portion of the income received by a customer by virtue of the acts performed by the entity; or e. An attorney licensed to practice law in North Carolina acting solely within the scope of that person's professional license. (N.C. State Bar Attorney Listing https://www.ncbar.gov/for-the-public/finding-a-lawyer/member-directory/ and the Attorney Referral Service https://www.ncbar.gov/for-the-public/finding-a-lawyer/)

Please note that the North Carolina Secretary of State cannot provide legal services in the event that you need legal services in matters relating to Invention Development. Consult your own attorney. If you need assistance in locating a suitable attorney, you may consider contacting the Attorney Referral Service by phone—(800)662-7660 in-state or (919)677-8574 out-of-state or in the Raleigh area. The Attorney Referral Service is available online at https://www.ncbar.gov/for-the-public/finding-a-lawyer/. There is no charge for receiving a referral from this service, but if calling from out of state, there is a toll charge for the long distance phone call. When calling the attorney you are referred to, most attorneys charge a $30.00 fee, which entitles the caller to a 30 minute consultation with the attorney. Callers should clarify the consultation fee in advance with the attorney. The Lawyer Referral Service does not provide referrals to pro bono attorneys. For a referral to a pro bono program, please contact the Pro Bono Project of the North Carolina Bar Association at (800) 662-7407 or North Carolina Legal Aid at (919)828-4647.