Andrew Harsley appeared on the programme and convinced two of its panellists, Duncan Bannatyne and James Caan, to invest £150,000 in the Rapstrap, a plastic cable tie.
But the Intellectual Property Office (IPO) has said that the invention is already partially covered by a patent owned by a company Harsley helped to found. He has since left the firm.
Millepede's patent for the reusable plastic strip lists Harsley as the inventor. Harsley has said that he has since been awarded patents in China and Mexico for his own Rapstrap product.
Harsley left Millepede to set up Rapstrap, but his name is on Millepede's patent for its strips, which was granted in 1999.
Millepede asked the IPO to conduct a full technical review of Harsley's Rapstrap to see if it infringed its patent. The IPO found that the strip did possess characteristics covered by Millepede's patent.
"The Rapstrap cable tie falls within the scope of claims 1 and 5 of the patent," said examiner Steven Morgan.
"I was amazed when Harsley, who had previously founded the Millepede company, forgot to mention Millepede’s existence on the programme," said John Butterworth, managing director of Millepede. Then afterwards all the parties showed a lack of interest in talking to Millepede about our prior patent. I hope this official review will now change that situation.”
The review is just an opinion and does not grant Millepede any new rights. If it wants to stop Harsley from selling his strips or force him to pay licence fees it will have to do so through the courts.
David Fry of law firm Agile, which advised Harsley, told The Scotsman newspaper: "the opinion will have no bearing whatsoever on an infringement action in front of a court because they will firstly address the issue of validity".
Harsley had won a £35 million contract for up to a billion units of his cable ties and the invention was touted as one of the success stories of entrepreneurial challenge programme Dragons' Den.
Millepede sells a variety of ties and rods for securing bags, plants or cables, including Mille-Ties, anchors and cable rings.