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Con Man Arrested Who Stole Patents of Inventors He Promised to Help

Friday, October 15, 2010
Contact: (415) 703-5837

SACRAMENTO – The California Attorney General’s Office announced the arrest today of a con man who defrauded entrepreneurs by promising to help them secure patents on inventions ranging from sophisticated software to garden products but then stole their inventions and made thousands of dollars selling their patent rights.

“This thief of intellectual property pretended he was helping entrepreneurs obtain patent protection but instead sold their inventions and took all the profits,” said Attorney General Edmund G. Brown Jr.

Today, Franklin Michael Beninsig, 53, who currently lives in Reno, was arrested and booked in Washoe County Jail. He faces four felony charges in Sacramento County, including theft and embezzlement. If convicted, he could receive five years in prison. Bail was set at $50,000.

From 2004 to 2008, Beninsig represented himself as a patent law expert and investment consultant. At his Hot Pepper Ventures office on Investment Boulevard in El Dorado Hills, Beninsig wooed entrepreneurs by promising to help them file patent applications with the United States Patent and Trademark Office. He claimed he worked with ghost writers and patent lawyers in India who could draft patent applications quickly and inexpensively.

But when Beninsig filed patent applications for his clients’ inventions, he listed himself as either the sole inventor or a joint inventor.

Bob Pingree, chief executive of Nexxus Systems in Scottsdale, Arizona, paid Beninsig $8,000 in 2004 to file a patent application for software that searches for online and broadcast media preferences. Beninsig listed himself on the application as the sole inventor.

When Pingree questioned him, Beninsig promised to remove his name, but instead he sold the patent rights for $55,000 plus royalties.

Jerry Ponzo, president of Backyard Dream in Granite Bay, met Beninsig in 2008 at an investors’ conference in Silicon Valley and later paid him nearly $13,000 to find investors for his new product, a three dimensional galvanized wire panel for climbing plants. Beninsig found no investors, but he claimed Ponzo’s patent applications were not written correctly and offered to fix them. Instead, he listed himself as a joint inventor, which Ponzo discovered when he checked the patent office’s website.

The Attorney General Office’s investigation began when it received a complaint from an entrepreneur who complained he gave $30,000 to Beninsig to find investors for his product, a biodegradable mobile urinal, intended for truckers and other long-haul drivers, called The iPee. Beninsig wasn’t charged in that case in part because he arranged some meetings with investors, which proved unsuccessful. But the entrepreneur tipped investigators to other disgruntled inventors with whom Beninsig was involved.

The Attorney General’s office is prosecuting Beninsig’s case. The complaint and arrest declaration are attached.

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AttachmentSize
Patent Complaint138.93 KB
Patent Arrest Declaration278.86 KB

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