The essence of public data on trademarks lends itself to the extraction of information and to a considerable amount of misunderstanding, manipulation and fraud. Many private companies have thus, monopolized public data for their own commercial benefit. By using official-sounding names such as "Patent & Trademark Office" and "Trademark and Patent Office" fraudulent third parties continue to mislead trademark owners. This article explains the impacts and challenges as faced by not only the USPTO but also the private practitioners and other entities. It also brings forward various suggestions and solutions as suggested time and again by the OPIA (Office of Policy and International affairs) and USPTO (U.S. Patent and Trademark Office).
USPTO and Fraudulent Solicitations:
The U.S. Patent and Trademark Office (USPTO) is the federal U.S. patent granting and trademark registration agency. By partnering with other agencies to secure effective IP protections in free trade and other international agreements, the USPTO facilitates successful IP security for U.S. innovators and entrepreneurs worldwide. The USPTO has built mechanisms over the years to protect trademark owners and innovators against fraud, infringement, and abuse by those who seek to steal their patented inventions, designs, brand names, and livelihoods. When a patent application is filed and the patent is granted, there are certain requirements of maintaining the patent which requires payment of a maintenance fees. While payments needed for the maintenance of U.S. patents and trademark registrations must be charged directly to the U.S. Patent and Trademark Office (USPTO), there are several non-U.S. Patent and Trademark Office (USPTO) entities that send requests for maintenance requirements to patent and trademark owners.
The existence of public data on trademarks contributes to the extraction of information and to a considerable amount of misunderstanding, manipulation and fraud. Trademark scams is an issue that has been growing gradually over the past few years. With technological advances, it is now easier for opportunists to scan for public trademark data and extract relevant information for their commercial benefit, including the name of the owner and attorney and contact information. Companies have successfully created scam messages that look less like junk mail and more like proper invoices or correspondence from official government departments. In order to avoid making excessive payments, recipients therefore need to consider distinctions between scams and official correspondence. Usually, the correspondence either requires a payment for the publication of the mark in different "registers" or shows that there are applications or registrations by third parties in their country that may affect the registration. Emergency notices also cause concern among the trade mark owners and attorneys. Usually, a red flag for these forms of scams is that they say that someone else has applied for a similar mark or domain name to be licensed, so you have to act immediately.
Some businesses have advanced technology that enables them to search public records for when an official fee payment is due, and to send out scam communications demanding payment of such fees around the due date.
Impacts and challenges:
These fraudulent solicitations include two types of trade mark scams:
- The ones who take money from the clients and don't do anything
- Those who charge enormous fees from clients and file on their behalf.
Different offers involving renewal and maintenance of documents, recording of trade mark registrations with U.S. Customs and Border Protection, monitoring of trade mark, and recording in vague databases. It came to light that these solicitations not only impacted the clients but affected various other aspects like the Patent office's business, law practices, client relationships and trusts. Other serious results of these frauds includes diminished perception of trade mark value, bad reputation among the clients, panicked reaction, loss of sale etc. The administrative burden of tracking the fraudulent companies, and advising them to stop contacting the clients, is another serious concern. When offering for renewal of registrations were made , no inquiry as to whether the mark was still used in trade on all the goods and services was made, or whether excusable non-use, or mention the need for a specimen of use – calling into question the validity of renewals. It came to the notice of the officials that some of the scams were so professionally executed and looked so official that even specialized law firms couldn't spot these solicitations quickly.
Another major challenge while dealing with these frauds is that the scammers are highly sophisticated and their scams are not limited to the United Sates. They are really adept when it comes to erasing their track record and are very quick. Scam investigations require a significant amount of resources for agencies that have already been stretched to address issues such as violent crime, drugs etc. Evidence-gathering is usually international in scope and involves cooperation with numerous international governments and enforcement agencies.
Scammers are constantly using "burner" mobile phones, moving "virtual office space" addresses for victims' sent check, and opening bank accounts with fake names. The reluctance of victims to come forward, makes it difficult to pursue offenders, and is a major problem noted by USG officials.
On the 26th of July, 2017 a roundtable was held by OPIA (Office of Policy and International affairs) and trade mark Operations, to raise awareness about the fraudulent solicitations and come up with solutions for the same. One of the suggestions that came forward was that the USPTO database to be searchable by email and IP address, which would make the USPTO database searchable. It is better for private practitioners looking to locate scammers. United States Postal Inspection Service (USPIS) supported this argument, noting that it would be extremely helpful to be able to scan IP addresses of all transmissions put into system at USPTO and would accelerate the process of identifying corrupt individuals, as company names change all the time but IPaddresses don't.
Governmental regulation of companies that send solicitations for trademark related services could prove to be helpful. This could be achieved by 1) a compulsory process of business registration and 2) additional government oversight, especially targeting companies with inaccurate or misleading applications. A prominent warning that these firms are not associated with any Government entity.
Current Practices and the way forward:
At present, the USPTO provides warnings in the filing of receipts for trademark applications, in emails transmitting office actions and with certificates of registration. In order to streamline and enhance these steps, the USPTO aims to review the language of each of these alerts and to apply the same details to the pages. Although the USPTO lacks the authority to bring lawsuits against scammers, they have issued letters of cease and desist to some of them in the past, but this has not been especially successful without the power to prosecute them. Some scammers have also been pursued by Office of Enrollment and Discipline (OED) for improper law practice where they have improperly made filings on behalf of victims of their scams.
The USPTO is aware of and actively attempts to tackle the proliferation of scam alerts. A web page on these alerts, including an instructional video, as well as a list of the names of common offenders, is included on the official USPTO website. Furthermore the USPTO requires those receiving such a notice to report it to the Federal Trade Commission (FTC), since the FTC is the body with the power to prosecute offenders.
- United States Patent and Trade Mark Office. (2017) Summary of Fraudulent Solicitations Roundtable. Available at https://www.uspto.gov/sites/default/files/documents/Summary_FraudRT.pdf
- United States Patent and Trade Mark Office, (2017) Non-USPTO Solicitations. Available at (https://www.uspto.gov/patents-getting-started/using-legal-services/scam-prevention/non-uspto-solicitations
- Department Of Justice (Office of Public Affairs). (2017). California Man Sentenced to Prison for Perpetrating Trademark Scam. Washington DC. Available at https://www.justice.gov/opa/pr/california-man-sentenced-prison-perpetrating-trademark-scam
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