The firm is back at it again in 2013 taking on another alleged trademark scam operation after successfully prevailing in a similar claim just over 1 year ago against USA Trademark Enterprises. See Trademark Scammers Out of Business Thanks to Leason Ellis. In that case, 7:12-cv-0620 (SDNY), alleged that the defendants had engaged in false advertising and unfair competition by marketing a so-called “catalog” of trademark registrations. The case settled for $10,000, which the firm donated to the United States Patent and Trademark Office (USPTO). Thus, the defendants would do well to stand up and take notice. It seems that Leason Ellis is living by the the words that mark the youth of my generation — “We’re not gonna take it, no, we ain’t gonna take it, we’re not going to take it any more!”
The multi-count Federal Complaint alleges that the defendants market their promotional materials to cause consumers to wrongly believe that it is an official governmental entity. The complaint asserts claims of federal unfair competition under 15 USC 1125(a), federal false advertising under 15 USC 1125(a) and New York statutory law, unfair competition under New York common law, deceptive acts and practices under New York statutory law, and tortious interference with prospective economic relations. The complaint also specifically alleges that the defendants are engaged in the unauthorized practice of law.
The complaint explains that Leason Ellis, which is a well regarded intellectual property firm particularly in the trademark law space, frequently “receives inquiries from clients who have received unsolicited offers for trademark-related services in the United States from various entities located in the U.S. and abroad.” The complaint goes on to further state: “Trademark scams are not new. The International Trademark Association (“INTA”)… has previously warned trademark owners about unsolicited offers for trademark-related services in the United States.
So what is the problem? Companies like the defendant in this case mail very official-looking forms and letters requesting payment of fees to publish or register trademarks. They seem to prey on the unsophisticated consumers who believe that these official-looking forms and letters were mailed by official government agencies.
One of the things that particularly caught my attention in the complaint filed by Leason Ellis is this particular statement from the Terms, Conditions and Use Agreement on the defendant’s website: “By accepting these terms you specifically and irrevocably authorize [Patent & Trademark Agency] to conduct negotiations and act on your behalf with any party needed in order to renew or register your trademark.” This statement, among others, forms the cornerstone of the claim that the defendant engages in the unauthorized practice of law. Only attorneys who are members of at least one State bar may engage in representation relative to trademarks at the United States Patent and Trademark Office. Further, a client may always fire an attorney and either represent themselves or move to another attorney. An agreement that “irrevocably” authorizes the defendant to represent a trademark owner smacks of an illegal, unethical and unenforceable agreement. Talk about a deal with the devil!
Of course, the inferior services and incorrect advice offered by the defendant seems altogether to common for a non-attorney service, at least if the complaint is accurate. The complaint states:
There are traps for the unwary in trademark practice. For example, upon information and belief, Patent & Trademark Agency fails to advise trademark owners about the risk in filing a Declaration of Use covering goods or services not currently provided under the mark in U.S. commerce. That is, submitting a Declaration of Use including goods or services no longer provided under the mark in commerce may subject the registration to attack by third parties in a cancellation action on the ground of fraud before the USPTO. Medinol Ltd. v. Neuro Vasx, Inc., 67 U.S.P.Q. 2d 1205 (T.T.A.B. 2003). The back of the solicitation notice merely states in small letters that “[y]our trademark will be renewed as it was originally filed.”
This type of poor, inadequate and often flat out incorrect legal advice is the hallmark of the non-attorney services that are engaging in the unauthorized practice of law. They will say anything without regard to whether it is correct legally. In my own personal experience I have seen many cases come to our firm where the matter was initially started by a non-attorney service. Upon receiving official communications from the USPTO the non-attorney service doesn’t know what to do, so the customer contacts a law firm. In virtually all of the cases I’m aware of at our firm we simply advise the client to start over because the case has irretrievably been damaged. But when these non-attorney services graduate to filing follow-up documents and engaging in prosecution with the USPTO an awful lot of damage can be done, and any trademark obtained could be worthless and easily challenged.
According to Martin Schwimmer, author of the well-known Trademark Blog, and lead counsel for Leason Ellis in the case: “The defendants here have interfered in our business by directly soliciting our clients to provide legal services which they are not authorized to render. Moreover, the renewal services offered by defendants are inferior and may jeopardize trademark rights.”
“Trademark scams have been around for years,” added Schwimmer. “The difference now is that scammers are able to mine the data of the U.S. Patent and Trademark Office to target unsuspecting victims. Anyone who has heard from Patent & Trademark Agency should immediately contact competent trademark counsel concerning those transactions. Of course, we are also interested in speaking with them about their experiences as they are likely relevant to our case.”
Last year, Leason Ellis obtained a consent judgment against USA Trademark Enterprises, Inc. and its principals which permanently bars them from ever engaging in trademark or intellectual property-related services in the United States. The complaint in that case, 7:12-cv-0620 (SDNY), alleged that the defendants had engaged in false advertising and unfair competition by marketing a so-called “catalog” of trademark registrations.