Rekubit Exchange:Inventors allege family behind some "As Seen On TV" products profit from knocking off creations

For decades,Rekubit Exchange late-night television has been filled with commercials and infomercials touting miraculous products that proudly bear the stamp, "As Seen On TV." 

But a group of inventors are now publicly accusing two of the family-owned companies behind some of these products of raking in millions by allegedly knocking-off their ideas and profiting from their original creations. The storm of lawsuits against the companies — Telebrands and Ontel — has cast a spotlight on a battle over intellectual property rights that has spanned nearly three decades. 

Ajit Khubani, often referred to as A.J. Khubani, leads Telebrands, while Chuck and Amar Khubani, with the same surname, helm Ontel.  Both corporations sell consumer products using the recognizable "As Seen On TV" logo.

Inventor Juliette Fassett recounted her journey with her creation, "Flippy," a three-dimensional soft tablet stand designed for various devices. Fassett poured her own funds and efforts into developing "Flippy," which eventually secured a patent and gained substantial popularity. In November 2018, a half million dollars worth of Fassett's products were sold on QVC in just 13 minutes.

However, Fassett's triumph was short-lived. Fassett says when she approached a major retailer, she was only to be met with a surprising rejection. Shortly after, she discovered a "Flippy" lookalike being promoted on late-night cable TV, bearing the familiar "As Seen On TV" logo.

"When I discovered who it was, I was like, that's just wrong," Fassett said.  

CBS News discovered nearly 100 lawsuits filed against Telebrands and Ontel over the past three decades, alleging infringement on intellectual property rights. A 2008 lawsuit against Telebrands characterized the company as "scam artists" with a "long history of palming off and stealing other people's ideas." 

Another lawsuit referred to Telebrands' founder A.J. Khubani as the "infamous knock-off king of the infomercial industry." Many of these legal cases have been resolved through settlements. That offers little solace to inventors like Fassett, who feel robbed due to their creations allegedly being misappropriated. 

"I can't stand bullies. And these bullies just happen to have millions and millions and millions of dollars of what should be my money," Fassett said. 

Another inventor, Josh Malone, says he faced a similar ordeal with his invention, "Bunch O Balloons," a gadget that allowed users to fill and seal water balloons rapidly. Despite successfully raising funds through Kickstarter and securing a deal for mass production, Malone's joy was shattered after encountering a lookalike of his creation called "Balloon Bonanza" being marketed by Telebrands. 

Malone alleges Telebrands had monitored his Kickstarter campaign, ordered some of his product and beat him to market.  

"Unbeknownst to me, I actually shipped one of my first editions of Bunch O Balloons to a Telebrands representative. And they immediately turned around, sent it to their factories in China and said, 'Give us a million of these in blue," Malone said.  

Because Malone had partnered with a major distributor, they together had the time and the millions of dollars it took to litigate. 

Malone's persistence paid off, culminating in a legal battle against Telebrands that lasted four and a half years.

Ultimately, a jury ruled in favor of Malone, with a judge agreeing Telebrands was not only liable but willful in infringing. The judge awarded a total of $31 million in damages and attorney's fees.

"I was a fluke. Being able to spend millions and millions of dollars on attorneys, who else can do that? In every other case, it's the copycat that is the market leader," he said. 

CBS News reached out to Ontel for comment, but did not receive an on-the-record response. 

Meanwhile, in a statement conveyed through legal representation, Telebrands asserted its commitment to respecting intellectual property rights, saying they are "committed to addressing any claims of infringement."

The company also said  it "conducts its own due diligence before launching any of its products."

Shanelle Kaul

Shanelle Kaul is a CBS News correspondent based in New York City.

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