There are few things more annoying than the feeling that you have been duped into paying for something that you neither need nor want. IP owners, and particularly trademark owners, are common targets for scammers seeking to obtain fees for bogus, unnecessary or questionable services offered at outrageous prices. No doubt these scams work because people are busy – but the notices also are steeped in what looks like official language, may appear to come from official governmental auspices, and seem to suggest that the fees cover “renewal,” “registration” or “publication.” These activities are all items that IP owners are accustomed to paying for, so when they see notices requesting payment (rather than merely soliciting interest in a service) they tend to pay the invoice rather than ask questions about the content or source of the purported services.
Here’s how it works. A trademark owner files to protect its mark in the U.S. or abroad. They might use a law firm for that service or file directly. Regardless, information about the applicant and the mark is publicly available through the online database maintained by the U.S. Trademark Office (or other international offices). The purported scammer service provider picks up the public information about the applicant and the mark, and then sends a notice to the applicant offering what looks like a registration service, a renewal service, or possibly suggesting that there is a publication fee due for the application.
The notice from the Worldwide Database of Trademarks and Patents is a typical example. The communication looks very official and suggests that the service is a “renewal” and cross references the underlying U.S. federal trademark registration.
A similar notice from the United States Trademark Maintenance Service references statutory protections under the “United States Trade Marks Act” [sic] and, if you read carefully enough, requests payment of fees to “watch” the mark.
We also are frequently asked about the “United States Patent and Trademark Renewal Notice,” which purports to offer renewal services but in actuality, what is being renewed is a re-publication of the mark in yet another catalog that probably no one reads.
Many unsuspecting trademark applicants are likely to believe these notices, which are presented in the form of an invoice (and doesn’t that always make one pay more attention?), and appear to come from the U.S. government or some other quasi-official agency. The reader, likely someone who is not interested in reading the fine print (there’s a lot of it) is likely to believe that a payment is necessary to ensure that the application they know they have filed is properly registered. In reality, however, all the recipient will obtain for its payment is a service unrelated to the actual registration of its mark. Any official registration costs or any other actions that might be necessary to register the mark are not covered by payments to these third party service providers.
At our firm, we try to warn clients about these scams, but often we learn of a client’s payment for these services after the fact and despite our warnings. So we say again both to our clients and to anyone who has filed to protect their intellectual property in the U.S. or elsewhere:
PLEASE DO NOT PAY ANY FEES TO ANY THIRD PARTY RELATING TO YOUR TRADEMARK RIGHTS UNLESS YOU HAVE READ AND ARE COMPLETELY CERTAIN THAT THE SERVICE OFFERED IS SOMETHING YOU NEED AND WANT TO ACQUIRE.
Recently, a U.S. IP firm, Leason Ellis LLP, sued USA Trademark Enterprises for its deceptive engagement in a scam similar to those described above. In particular, USA Trademark sent bogus notices offering to “register” trademarks in a “Trademark Selection Catalog.” The Leason firm alleged (among other claims) that the notices constituted Unfair Competition and False Advertising under federal law, 15 U.S.C. § 1125(a), and Unfair Competition under various state law theories. In essence, Leason contended that the notices sent by defendant misrepresented the nature, characteristics and source(s) of the services offered, and were sent under the “color of false authority” since they seemed either to come from an official U.S. government office, or from law firms working for the applicant recipients, when in reality, the service was independent, and did nothing to assist in the trademark registration or protection process.
The Leason suit resolved in a Consent Decree in which defendant agreed to permanently refrain from marketing, selling and distributing its bogus catalog and never to conduct business in the U.S. in the field of trademarks or intellectual property again.
We salute the Leason firm and hope other providers of similarly bogus services will take note of the lawsuit and its outcome. This blogger believes defendant’s activities in the Leason action, as well as the purveyors of the other notices described above, also violate Section 5 of the FTC Act, which gives the Federal Trade Commission jurisdiction to bring action against business practices that mislead consumers. While we have no problem with legitimate service providers soliciting clients fairly, we wish the FTC would take notice of the deceptive practices of a few providers and assist the IP community in stamping out these potentially deceptive notices.