Trademark Scams Aplenty

Trademark Scams Aplenty

by Susan Basko, esq.

Trademark scams are harming the work of the U.S. Trademark Office, as well as harming legitimate Trademark lawyers, and duping and defrauding trademark applicants. If you want to apply for a trademark, how can you spot a scam?  This is fairly easy -- if you are using an automated service, instead of a trademark lawyer, you have probably been taken in by a scam.  If you are not conferring directly with a real live licensed lawyer, it is probably a scam.  If it appears to cost too little, it is probably a scam.  If it arrives in the mail demanding money, it is definitely a scam.  Below, we will look at a few of the biggest trademark scam/ fraud situations going right now.  

First, I recently received this Alert from the U.S. Trademark Office.  


Trademark Alert.  U.S. lawyers: Beware of solicitations asking to use your bar credentials

The USPTO recently learned that U.S. attorneys are again receiving emails from unlicensed individuals offering to pay to use the attorney's bar credentials in trademark filings  These solicitations are a direct attempt to circumvent the U.S. counsel rule.

Although we believe that only a small percentage of practitioners are engaging in this practice, the USPTO would like to remind U.S. attorneys that such an arrangement would likely be aiding the unauthorized practice of law and also a violation of federal rules, including the USPTO's Rule of Professional Conduct, 37 C.F.R. Part 11.

Scams can adversely impact the integrity of the trademark register.  If you receive a solicitation asking to use your bar credentials, please forward it to TMScams@uspto.gov.

Explained: The US Trademark Office requires any foreign entity to hire a U.S. lawyer to conduct any work with the U.S. Trademark Office, including trademark applications and the certification process.  In addition, the U.S. Trademark Office only allows licensed U.S. lawyers to represent any other person or entity before the Trademark Office.  There are non-lawyers who engage in trademark registration scams -- and thus, they try to "borrow" credentials from lawyers.  However, as you can note in the warning above, any lawyer agreeing to this is likely to lose their law license and possibly face criminal charges.  

ANOTHER HUGE TRADEMARK SCAM involves automated websites that claim to be registering trademarks for people, often at unrealistically low prices.  This whole practice started several years ago, and this is how it works:  Only a U.S.-licensed lawyer can register a trademark for any other person or company,  So, these automated websites claim that it is the applicants themselves who are registering their own trademark.  But, this makes no sense.  Trademark registration is a process that takes at least a year, and involves interaction with the trademark examiner.  These trademark website scams also usually charge unrealistically low prices.  The registration fee itself is $250 - $350 per class of goods or services.  On top of that, there is the work of a trademark lawyer for at least a year.  So, when you do a google search and up top are listings for companies charging $49, $59 or $69 for trademark registration, you know it is a scam.  It could not possibly cost that low when the required application fee itself is several hundred dollars.

I saw one trademark scam ad touting a "Turnaround Time of 72 Hours." This is not even slightly possible.  After filing an application, it waits for about 4 months to be assigned to a Trademark Examiner. In 72 hours, the application may (or may not) show up on the USPTO Database as "LIVE."  "Live" is used to denote trademarks that are in the application process that have not yet been declared DEAD, as well as those that have been successfully registered.  Perhaps the Trademark Office should make a different designation for trademark applications that are still in the application process -- for example, "Application Pending."  Referring to fraudulent trademark applications as "LIVE" facilitates that fraud.  The scam companies can send their customers a fake trademark certificate and point to their trademark on the USPTO database with the word "LIVE" next to it.  If the scam company takes no further action on a doomed application, as things are now run at the USPTO, that "LIVE" designation will remain for a year.  That feeds the fraud and enables it.  

Tim Lince of World Trademark Review did an absolutely brilliant investigative journalism piece on these trademark scam companies.   Muhammad Burhan Mirza of Digitonics Lab was arrested for running many of these trademark websites.  He and nine others were charged with fraud and money-laundering for running sites that claimed to be doing trademark registration, logo creation, ghostwriting services, etc.  

One of the many fraud websites was one called USPTOTrademarks.com  Obviously, that name would fool a lot of people into believing it was legit.  "The website (‘usptotrademarks.com’) uses the USPTO’s logo and colour scheme, while its About Us page claims to be “a project initiated by experienced lawyers and technologists” with “12 years of experience”." The website claims to be in "San Jose, California," but the operators were arrested in Pakistan.  How did it work?  They simply sent fake Trademark certificates to the applicants. "Even more concerningly, the report alleges that the company gave around 70% to 75% of clients “fake/fabricated” USPTO trademark certificates as part of the scam." 

Despite the flurry of arrests and allegations of fraud and extortion against these websites, some of them are still online to this day, such as USPTO Trademarks, a screen shot taken just now, shown below.  The entirety of U.S. Intellectual Property law is at stake -- at this juncture, the U.S. needs to step up and shut down these kind of scams with the same ferocity it uses to shut down kiddie porn sites.  Look at the site below-- could you blame people for being tricked into thinking this was legit?  

 

The U.S. Trademark Office has many times stated that it is not within their allowed activities to engage in prosecution of frauds or scams -- though the office does cooperate fully with authorities.  

This proliferation of scams harms the public, as well as harming the USPTO.  The only solution I can see that would work would be to require every trademark application to be filed by a licensed attorney and to have that attorney vouch for the legitimacy of the application and of his or her intent to conduct the full application process.  Federal courts require this of lawyers filing lawsuits.  It is time to do this with trademarks.  The trademark office is inundated with thousands of these fraudulent trademark applications, according to a follow-up article by Tim Lince of World Trademark Review (WTR).  In February of 2021, World Trademark Review published a list of the trademark applications made by 6 of these companies.  There are 81 pages of these trademark applications, with about 27 listed on each page!  The list gives the status of each application. Applying for a trademark is a process that takes at least a year and has various phases to it.  

If an application is going to fail, it usually takes at least a year from the date of filing for it to go DEAD on the USPTO database.  That's because a trademark application is filed and then sits for about 4 months waiting to be assigned to an Examiner.  If the Examiner issues a Nonfinal Office Action, the applicant is given 6 months to file a response.  If no response is filed or an incomplete or unsatisfactory response is filed, as would often be the case with an application not being tended to by a trademark lawyer, then it will go dead, usually several months after the 6 months deadline.  This means that applications destined to fail are on the USPTO Trademark Database as "LIVE" for about a year.  This harms and affects applicants who are trying to register trademarks that may conflict with the trademarks on the doomed applications -- their applications will be  put on hold to wait for the earlier-filed application to clear or go DEAD.  

This massive influx of trademark applications not properly made causes a huge amount of needless work for Trademark Examiners.  The Examiners are required to respond to each application as if it were legit.  Recently, however, the Trademark Office created a rule that short-circuits some of this.  The office has begun requiring an email address of the applicant.  The fraudulent companies have been in the practice of supplying their own email, probably to keep the applicant from finding out their application is not being handled properly.  After all, if a company is sending fake Trademark Certificates to 75% of its customers, the company does not want its customers in contact with the Trademark Office, where they may be alerted to the scam.  By having the Examiner request the trademark applicant's email address early on in the process, the Examiner can halt the process early on without progressing to the painstaking efforts of reviewing the application and writing a Nonfinal Office Action.

Google ads is at least partly to blame for this fiasco.  The fake and fraudulent trademark companies buy up key words and pay to have their ads at the top of the list when a person google-searches for trademark registration.  The ads offer very low prices, quick turnaround times -- none of which comport with the reality of trademark applications.  But, those being suckered into using these sites cannot be blamed -- the site says "USPTO Trademark," looks legit, etc. The REAL website of the US Patent and Trademark Office , USPTO.gov, to be truthful, is a cluttered mess.  It would be hard to blame the public for being attracted to a website that claims to be dealing in trademarks and makes it look as if the process is going to be easy, smooth, well-platformed, and affordable.  Should the US DOJ stop Google from running ads for fraudulent companies?  Better asked, WHY is the US DOJ allowing Google to run ads for fraudulent companies, companies that harm and make a mockery of the U.S. Trademark, Patent, and Copyright Offices?

The real USPTO website -- USPTO.gov  - is cluttered, incomprehensible, has a search engine that delivers poor results, and is not in any way user-friendly.  A person wants to register a trademark, and if they do somehow manage, against all odds, to find the real USPTO website, they find up front a very dated photo of Jim Henson and the Muppets, lots of information on Covid-19, and cluttered verbiage with hundreds of links.  This ludicrously poor website design drives people to using fake and fraud websites that at least appear to offer streamlined solutions.  People get lured by absurdly low prices that, in fact, do not even cover the actual trademark registration fees.  Getting a trademark is like getting a university degree -- you can either pay a lot of money and spend a lot of time and work and get a genuine trademark and the certificate that goes with it, or you can pay $69 and fill out an online application and get a fake certificate.  

Screen shot of half of the front page of the real USPTO Website, below.  


My suggestions on how to deal with the current mess at the USPTO:

1. Require all trademark applications to be made only by licensed lawyers.  Most successful applications are already made by licensed lawyers, so all this would really do is get rid of the fraud applications and the nonsensical or poorly-made applications.  Have a list of lawyers who practice before the Trademark Office, and publish it, so the public knows how to find a real trademark lawyer.

2. Have the DOJ take aggressive action against fraudulent Trademark websites and companies, domain name ownership that confuses the public, etc.

3.  Have a public awareness campaign on what trademark is, how much it costs, and the rather complex process involved in getting a trademark.

OTHER TRADEMARK SCAMS.  

Trademark applicants, even those making legitimate applications, are besieged by mail from fake companies demanding payment for fake trademark services.  The mail usually looks like bills and comes from addresses that include company names and addresses that sound somewhat legit.  These bills demand payment of hundreds, or usually thousands of dollars.  I have come across people online who have been paying hundreds of dollars each month to "maintain" their trademark.  These people have been duped by realistic-looking bills.  IF.. if these people had registered their trademarks using a real lawyer, they could ask the lawyer about the bill, and the lawyer would tell them, "No, that is fake.  Don't pay it."  

The U.S. Trademark Office is very well aware of these scams.  The Office, unfortunately, refers to them as "misleading notices."   "Misleading notices" is far too soft a term for fake bills that cause people to pay thousands of dollars to a scam company.  "Beware of all types of offers and notices not from the USPTO. In March 2017, the operators of a private company—the Trademark Compliance Center—were convicted of money laundering in a trademark renewal scam." https://www.uspto.gov/trademarks/protect/caution-misleading-notices  

The USPTO provides a list of the names of some of the companies that have been sending out fake bills and notices demanding money.  You can click on any of the links to see actual examples of the misleading notices.

Solicitations originating within the United States

Solicitations originating outside the United States


This video gives additional useful information about these scam solicitations that are sent to most everyone that applies for a trademark, whether or not the applicant uses a trademark lawyer.

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