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Every invention developer rendering or offering to render invention development services in this state shall maintain a bond issued by a surety company admitted to do business in this state.
The principal sum of the bond shall be five percent (5%) of the invention developer's gross income from the invention development business in this state during the invention developer's last fiscal year, except that the principal sum of the bond shall not be less than twenty-five thousand dollars ($25,000) in the first or any subsequent year of operations.
A copy of such bond shall be filed with the secretary of state prior to the time the invention developer first commences business in this state.
The invention developer shall have ninety (90) days after the end of each fiscal year within which to change the bond as may be necessary to conform to the requirements of this section.
The bond required by subsection (a) shall be in favor of the state of Tennessee for the benefit of any person who, after entering into a contract for invention development services with an invention developer, is damaged by fraud or dishonesty or failure to provide the services of the invention developer in performance of the contract.
Any person claiming against the bond may maintain an action at law against the invention developer and the surety.
The aggregate liability of the surety to all persons for all breaches of conditions of the bond provided herein shall in no event exceed the amount of the bond.