Davison Design and Development was accused of using false claims to trick customers into paying up to $12,000 to evaluate an invention.
The Federal Trade Commission had seen this before.
"I would say the invention promotion business is a business in which consumers should be extremely cautious," FTC spokesperson Elizabeth Tucci said.
Margaret Johnson, 81, of Morgan Hill learned that first hand. She spent nearly $1,000 trying to patent a birthday candle holder.
Johnson was one of 17,000 people nationwide who were tricked into spending money by a company that has since been forced to close.
