Alert December 16, 2010

Common Scams Trademark Owners Should Be on the Lookout For

In a busy office, an official-looking piece of mail arrives from an entity with an official-sounding name, and an address in Washington, D.C.  It states that in order for the company’s trademark to be published in a “register of trademarks,” the attached invoice must be attended to immediately… 

An individual at a company receives an urgent email from a foreign entity (frequently in Asia) that claims to be either responsible for registering domain names in a particular country or an “intellectual property rights consultant organization.”  Frequently, the email is address to “the CEO.”  The email warns that a third party has sought to register the company’s name or other trademark as a domain name or purchase the mark as a search keyword, and this entity wishes to first give the company, as the lawful trademark owner, the opportunity to acquire the rights itself.  If the email is not responded to within a certain period of time, the third party’s request will be granted and the domain will be lost…

Knowing that the company’s trademarks are valuable and that a third party’s misappropriation could irreparably damage the company’s reputation, what is the receiving party supposed to do?

In most cases, ultimately, nothing.

Both of these scenarios portray common scams that owners of trademarks frequently receive.  Whether a small company with limited experience in intellectual property matters, or a large company with multiple levels of staff, trademark owners and their employees should come to recognize these common scams, so they do not fall victim to or spend unnecessary time dealing with them.

“How did this happen?”

In the United States, the data in trademark registrations are publicly available on the Patent & Trademark Office’s website.  Similarly, information on new applications is made public within a day or two of filing, to give notice to the public of the claimed rights.  These databases include the application details and the name and address of the applicant.  Many other jurisdictions, including Canada and the European Union provide similar application and registration information at no cost through their websites.  Unfortunately, this information can also be accessed by the perpetrators of scams, who then use it in an effort to make a solicitation appear as credible as possible.  Online scammers will also crawl the web to obtain email addresses of trademark and domain name owners to send their solicitations electronically.

Trademark Registry, Publication, Renewal and Monitoring Scams

In the offline world, trademark scams typically come in the form of mass-mailed solicitations to have one’s mark “registered,” “published” or “monitored” in a prestigious-sounding registry or directory.  It’s the trademark equivalent of an offer to be listed in a “Who’s Who” directory.  These solicitations generally have official-looking names (which may include terms such as “Register,” United States,” “International” “Agency” or “Center”) at the top, and are often designed to look like they have come from a government agency with an address in Washington.  Many look like invoices and will sometimes include a convenient “tear and pay” coupon, for easy remittance. 

Such notices may also contain warnings that it is up to the mark’s owner, not the Patent & Trademark Office (“USPTO”), to protect a registered mark from confusingly similar marks.  While true to a certain degree, such warnings incorrectly imply the importance of subscribing to the advertised registry.  In the more “honest” solicitations, buried in the small print are notices that engaging the service is not a legal requirement and does extend the validity of the underlying registration, and that the service is not affiliated with a government agency.  Frequently, however, solicitations omit any such notice.  If the advertised registry is actually published by the operator of the scam, such a publication has no value from a legal standpoint.  In many cases, however, no such publication exists.

Another variety of dubious solicitation we have seen are trademark “monitoring” services.  These mailings typically feature official-looking letterhead and names, and include dire warnings about the obligation of trademark owners to take steps to monitor their pending applications, and/or to protect their marks from infringement.  These schemes are essentially designed to get you to pay for information (about your own application or third parties’) that is available for free on the websites of the USPTO (or the Canadian Intellectual Property Office).

The third category of solicitations our clients have received involve renewals.  Entities comb the USPTO databases for marks which are approaching the filing windows for renewal or maintenance filings.  They then send official-looking notices to the owners, admonishing about the importance of renewal and providing a handy form to fill out and return to them (“Do not forget to include your check”) to renew or maintain the registration.  The scam, of course, is to deceive trademark owners into thinking they have submitted a renewal application directly to the USPTO itself.  In fact, these entities are inserting themselves as the middleman, taking on extra layers of fees, and engaging in the unauthorized practice of law. 

The Canadian Intellectual Property Office and the European Community trademark office (known as OHIM) have been out front in recent years, publicly identifying and denouncing these scams.  Here in the United States, our Patent & Trademark Office has been less aggressive, apparently taking the view that these are matters that should be handled at the state level.  One non-specific warning has appeared here.  Some state attorneys general have investigated some of these entities for unfair and deceptive trade practices and/or the unauthorized practice of law, but what too often happens is that an entity will shut down but then reopen shortly after with a different name or using a different address.  This nebulous existence, coupled with the difficulty of suing and enforcing judgments against what are frequently foreign entities, for relatively small sums, also frustrates the ability of individual brand owners to take legal action against the perpetrators of such scams.

Domain Name Scams

The domain name solicitations, which we see almost daily, consistently follow the same pattern, and indeed are often word-for-word identical, with just the names changed.  A typical such email goes like this:

Dear CEO,

We are a professional intellectual property rights consultant organization, mainly engaged in domain name registration and internet intellectual property rights protection.

We formally received an application from “______________.” On August 6, 2010, whom applied for registering the internet keywords ‘‘[YOUR COMPANY NAME]” and some related domain names with our organization.

During our preliminary investigation, we found the keyword of those domain names is identical as your trademark. Therefore, we need to confirm with you whether you consigned _______________ to register with us or not? Or, is ______________ your partner or distributor? If you don’t have any relationship with this company, they may probably have other purposes to obtain those domain names and internet keyword.

We have already suspended this company’s application temporarily due to the seriousness of this issue. In order to avoid the vicious domain name grab, please let your principal make a confirmation with me via telephone or email as soon as possible. Thank you for your support to our work!

If you have any question, please do not hesitate contact me ASAP.

In the vast majority of cases emails like these come from a person or entity in China or elsewhere in the Far East.  They typically warn of pending domain name registrations in one or more of the Asian country-code top level domains (cc-TLD) – .cn, .hk, .tw, .asia, and so on.  They often claim to be an officially sanctioned domain registrar for such cc-TLDs.  They require a response within a very short period of time (or “asap”) in order to heighten the sense of urgency, and sometimes to provoke snap responses.

The key to recognizing such domain name scams is understanding the domain name registration process.  Under current practices, in the United States and everywhere else, requests to register a particular domain name are not checked to see if the domain name incorporates a registered trademark, and no effort is thus made to contact the owner of a trademark which might be implicated.  Trademark owners are not given any sort of veto or right of first refusal on domain name registrations.  This is the “big lie” inherent in all these solicitations.

The small lies will vary.  Sometimes someone indeed has registered the domains in question – and that is typically the party sending you the email, or someone in league with them.  They will then graciously sell the domain(s) back to you.  Sometimes the sending entity is indeed an accredited domain registrar in China (or wherever), but they are simply trying to lure you into using them to register these domains (typically by tying you into an expensive long-term agreement).  Most often, however, the sender is a fly-by-night scammer who has made up the entire story, and will take your money (and credit card information) and vanish into the ether.

“What can we do?”

The best weapon against scams such as those described above is knowledge.  In the United States and most other countries, a trademark owner will not be contacted by that nation’s IP office directly regarding maintenance or renewal of its trademarks, and will never be invoiced by the official patent or trademark office.  On the domain name side, the current domain registration system does not give prior notice to trademark owners when their mark is about to be registered as part of a domain name or keyword.  When in doubt, a questionable email or piece of correspondence should be forwarded to the company’s legal department or outside counsel.

All levels of employees who could be the recipient of such a solicitation, including accounting personnel and individuals who regularly open mail, should be made aware of such scams and instructed not to be alarmed by them and not to respond to them.  Do not reply to email solicitations even to tell the sender that you are not interested.  The reply only tells them they have found a valid email address which they can then attack with all manner of spam, viruses, malware, etc.

We encourage our clients to be proactive about protecting their brands here and abroad, and have helped many clients develop and implement trademark and domain name protection strategies which provide the appropriate amount of coverage consistent with the client’s business needs.  Goodwin Procter maintains relationships with a network of reputable trademark agents and other vendors all over the world who can assist in registering trademarks and domain names, as well as monitoring and investigating third-party uses of or applications for potentially confusing or infringing marks.

Purveyors of scams can be extremely creative and resourceful in devising ways to persuade companies and individuals to hand over valuable information and money, and brand owners need to be just as creative and vigilant in trying to preclude them from doing so.