"That's what's killing this country" — When Shark Tank panelists slammed entrepreneur over patent

Shark Tank season 3 episode 7 saw a fiery patent dispute when Technology Enabled Clothing founder Scott Jordan pitched for $500,000 in exchange for 15% equity at a $3.33 million valuation. The offer covered only his patent licensing arm while excluding his retail company, ScottEvest, which had reached $5.1 million in sales at the time of filming, as per Shark Tank Blog.

In the episode aired on March 12, 2012, Barbara Corcoran announced she would not work with Jordan, and Daymond John withdrew after the entrepreneur excluded the retail operation from the deal. While Kevin and Robert gave an offer, Mark Cuban expressed frustration.

"That's ridiculous. That's just common sense. Wires in, wires out. That's what's killing this country that we get dumb**s patents that people then turn around and sue when it's just it's ridiculous being," Mark Cuban declared during the confrontation.

The patent in question is a system of waterproof pockets and wire management to protect portable electronics in clothing. After rejecting two $500,000 offers and a $1 million deal, Jordan left Shark Tank without an investment.

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Shark Tank season 3 entrepreneur walked away from $1 million deal over patent dispute

Shark Tank entrepreneur Jordan's retail operation ScottEvest had reached $5.1 million in sales and projected $12 million for the upcoming year when the episode was taped. He showcased his patented system featuring specialized engineering for electronics-friendly outerwear. The technology included water-resistant pockets with clear touch-screen compatible panels and organized wire routing systems.

During his presentation, Jordan pulled out multiple gadgets from his vest pockets, showing how the clothing stored and protected various devices. The garments allowed users to carry iPads, phones, and other electronics while maintaining easy access and security screening convenience.

When Robert Herjavec mentioned seeing comparable products in magazines, Jordan admitted to running strategic marketing tests. The discussion shifted when Cuban questioned the patent's legitimacy. Based on his law background, Jordan defended his intellectual property rights.

Cuban argued that wireless technology would make the patent worthless. Other Sharks joined the debate, with Daymond John questioning how Jordan's patent differed from existing clothing designs.

Jordan explained that his company had received royalties from previous patent settlements from other manufacturers who had copied his designs. The disagreement escalated when he mentioned defending against infringement, prompting Cuban to characterize him as a patent enforcer rather than an innovator.

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Deal offers and rejection

Shark Tank investor Robert Herjavec stepped forward with a $500,000 offer for 15% equity in both the patent and retail operations. Jordan immediately called this proposal "insane." Kevin O'Leary, partnering with Robert, proposed an offer of $1 million for a 30% stake in the entire business package. When Robert declined the partnership, O'Leary matched the former's original terms.

During the negotiations, Jordan requested time to consult Steve Wozniak, who served on his advisory board. The Apple co-founder advised Jordan against accepting the offers, stating they undervalued the business. Upon returning, Jordan firmly rejected both proposals, leading to visible frustration among the Sharks.

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Aftermath and results

As per Shark Tank Blog, the business dispute continued on social media platforms. Cuban publicly supported Aye Gear, a Scottish company creating similar products. When Aye Gear was launched, Jordan's company sent them a warning email about potential patent violations.

Jordan's business path took several turns after the show. In 2017, he stepped down as CEO following controversial comments about Fox News viewers, according to the blog. By 2019, he regained control when faced with a $2 million bank loan crisis related to television advertising expenditure. The company struggled with tracking ad effectiveness, resulting in substantial marketing losses.

The COVID-19 pandemic brought additional challenges, causing a 50% drop in sales. Jordan adapted by conducting livestreams with his mother-in-law, discussing travel topics. As of April 2023, ScottEvest maintains steady operations with $3 million in annual revenue, according to the website Shark Tank Recap.

The company offers an expanded product line, including specialized dresses and skirts that incorporate the patented pocket system technology.

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New episodes of Shark Tank are airing on the ABC network.