LegalZoom Continues Unauthorized Practice of Law

By Gene Quinn
February 3, 2009

It is unbelievable to me that the United States Patent and Trademark Office allows LegalZoom.com to continue in what can only be described, at least in my opinion, as the unauthorized practice of law.  It is perhaps even more unbelievable that the various State Attorneys General appear unwilling to stop what I believe to be widespread unauthorized practice of law, despite the fact that LegalZoom is likely creating irreparable harm to its customers by engaging in fraudulent activities prohibited by the regulations that govern the United States Patent and Trademark Office.  The worst part of LegalZoom’s activities is not that they are practicing law without a license, but rather what they are telling their customers is flat wrong.

For many years LegalZoom.com has been assisting individuals and businesses with respect to filing trademark applications.  All over the LegalZoom.com website are disclaimers that LegalZoom is not a law firm and they only provide directed self-help.  Based on what I have been told by those within LegalZoom it is my opinion that they have crossed the line between legitimate self-help and the practice of law.  In the wake of recently amended 37 CFR 11.5 one could make a persuasive argument that they are no longer able to provide any assistance with respect to preparing and filing trademark applications.  What has to be clear though is that regardless of what tortured logic LegalZoom uses to convince themselves that they can prepare and file trademark applications, they simply do not have the authority to prosecute trademark applications once they are filed at the United States Patent and Trademark Office, but that is exactly what they are doing. 

It has come to my attention recently that LegalZoom sends out e-mails to those who have filed what is called an Intent to Use Trademark Application explaining that in order to complete their application they must file a Statement of Use within 6 months of filing the application.  LegalZoom also goes on to explain that they can file the Statement of Use for the customer.  This is alarming because you do not file a Statement of Use in this situation, and it does not need to be done within 6 months of the filing of the application, and the application is considered complete and will be processed without any kind of information regarding use.  So it would seem that LegalZoom is just wrong on the law here, or that they are engaging in unfair business practices aimed at generating unnecessary legal work.  I really don’t know which it is, but it is clear that LegalZoom does not know US trademark law, so why would you want to use their service to file a trademark application?

Not long ago I wrote about LegalZoom and explained that on their website they claimed to file more trademark applications than the top 5 law firms combined.  This is indeed what the website said, but not surprisingly that statement was removed shortly after my article was published.  This time to show what LegalZoom has been doing I have decided to provide the following screenshots, the first of an e-mail message sent to a LegalZoom customer (with the customer’s name removed for obvious reasons) and the second a screenshot of what their website said as of earlier today.

 

 

US Trademark Law provides for filing an application based on the applicant’s bona fide intent to use the mark in commerce, registration cannot be granted until the applicant files an Allegation of Use. The allegation of use must include verified dates of first use and a specimen of use for each class of goods or services.   The principal difference between the amendment to allege use and the statement of use is the time of filing. The amendment to allege use may be filed after the application filing date but before approval of the mark for publication.  If the applicant does not file an acceptable amendment to allege use during initial examination, or if an amendment to allege use is filed and withdrawn, and the Office issues a notice of allowance the applicant must file a Statement of Use within six months of the mailing date of the notice of allowance, or within an extension of time granted for filing of the statement of use.   So it is just flat out wrong to say that a Statement of Use must be filed within 6 months of the filing of the trademark application, as LegalZoom advises its customers (see first image above).

To many reading this you might ask what is the big deal between an allegation of use or a statement of use.  Indeed, they are largely the same in substance because you need to explain to the Trademark Office that the trademark is actually in use, but the technical legal term “Statement of Use” is not what needs to be filed, and it is simply wrong to suggest that it needs to be filed within 6 months of the filing of an application in order to have a complete trademark application.  So if you were to listen to the legal advice received from LegalZoom in this situation you would file the wrong document with the Trademark Office.  Wasted money for nothing!

At best LegalZoom is simply using a term of art out of context and then making the additional incorrect statement that the pending trademark application is incomplete.  At worst, they don’t know what they are talking about.  In either case, if you are paying for a service to prepare and file a trademark application don’t you think that you ought to be able to rest assured that the service knows the law and doesn’t get such basic, fundamental things wrong? 

This is exactly why you run a significant risk when you seek a low-cost non-attorney solution to provide legal services.  Yes, you can save money by using LegalZoom, but if they don’t even understand basic fundamental concepts of Trademark Law why would you want to save a few hundred dollars?  If you ask me, doing things right the first time and getting competent legal advice makes more sense than paying good money to those who simply do not understand the law and who are openly engaging in the unauthorized practice of law.


About the Author

Eugene R. Quinn, Jr.
President & Founder of IPWatchdog, Inc.
US Patent Attorney (Reg. No. 44,294)

B.S. in Electrical Engineering, Rutgers University
J.D., Franklin Pierce Law Center
L.L.M. in Intellectual Property, Franklin Pierce Law Center
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Gene is a US Patent Attorney, Law Professor and the founder of IPWatchdog.com. He teaches patent bar review courses and is a member of the Board of Directors of the United Inventors Association. Gene has been quoted in the Wall Street Journal, the New York Times, the LA Times, CNN Money and various other newspapers and magazines worldwide

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 22 Comments comments.

  1. patent leather February 4, 2009 10:21 am

    Have you filed an official complaint with the USPTO regarding their violation of 37 CFR 11.5? Maybe the OED needs an official complaint to begin their investigation process, I don’t know. I noticed after 37 CFR 11.5 went into effect, LegalZoom stopped filing provisional patent applications but I see now they are doing it again. Maybe they have an attorney on staff now? Or do they just figure they are out of the OED’s reach? I mean, what can the OED do anyway, if they aren’t patent attorneys, the OED cannot take away something they don’t have. In theory, the OED could refer such practice to each state’s DA for unauthorized practice of law. Come to think of it, if the OED expects us to follow their rules, they should at least set a good example and not let certain entities flagrantly violate them.

  2. Gene Quinn February 4, 2009 10:34 am

    Patent Leather-

    OED (and specifically Harry Moatz) knows exactly what LegalZoom is doing. I have told them, my former law partner John White has told them, former high ranking career USPTO officials that I know have told them. It is Harry’s position that he has no authority to take action against anyone who is not a patent attorney or patent agent, so there really is no requirement that you be a patent attorney or patent agent to represent people at the USPTO because OED will not do anything to stop the unauthorized practice of law, even when they know about it. It is the believe of the Patent Office that unauthorized practice of law is a state issue, regardless of the existence of 37 CFR 11.5. For more on this see:

    http://www.ipwatchdog.com/2008/12/10/invention-submission-alive-and-well/id=878/

    I also have heard that a number of patent attorneys and patent agents have filed complaints against LegalZoom, but OED refuses to do anything about it because those filing the complaints have not used LegalZooms’ services.

    The LegalZoom trademark practice is even more aggregious than the patent stuff, although filing and prosecuting design patent applications (which I know they have done in the past) is pretty bad. LegalZoom files the trademark applications in the name of the customer and when the customer gets an action and calls LegalZoom they tell them “we are not a law firm, we cannot tell you what you need to do, you need to get a lawyer.” We all know that practically every trademark application requires prosecution, so LegalZoom leaves people hanging. Even worse, they have no idea what stage the customer is in when they send out e-mails saying “time to file a Statement of Use.” So they are not only giving incorrect legal advice, they are doing it without knowing whether the customer can even file a Statement of Use or needs to file an Allegation of Use. I guess the genius minds at LegalZoom think “statement of use, allegation of use, what’s the difference?” Which is exactly the problem.

    -Gene

  3. EG February 4, 2009 3:30 pm

    Gene,

    My, my, Harry Moatz saying the OED has no authority to prevent unauthorized practice before the PTO. If Harry feels OED is toothless, what about him getting his buddies at the FTC to go after these folks?

    Speaking of which, what about bringing LegalZoom to the attention of the FTC? If I recall correctly, Invention Promotion Organizations (the “bad” IPO) have been brought to FTC’s attention for breaching the American Inventor Protection Action (AiPA) of 1999. Also, LegalZoom might be in trouble under various state deceptive trade practice statutes which would bring in the state AG office (many of which will go after such practices). Just some additional thoughts.

  4. EG February 4, 2009 3:43 pm

    Gene,

    After reviewing 35 USC 2(b)(D) again, I don’t buy Moatz’s position that OED doesn’t have the authority to go after LegalZoom for unauthorized practice. 35 USC 2(b)(D) says the PTO “may govern the recognition and conduct of agents, attorneys, or other persons representing applicants or other parties before the Office.” Why isn’t that enough to go after unauthoized practice before the PTO? If 35 USC 2(b)(D) doesn’t grant that authority, then it’s pretty toothless other than to regulate those, like us, who get registered; that’s pretty bizarre.

  5. Gene Quinn February 4, 2009 8:08 pm

    EG-

    I agree with you completely. What is the point in allowing OED to regulate patent attorneys and agents when they refuse to regulate those without a license? I have never understood why Harry doesn’t think he has the authority to go after non-attorneys who practice. The best explanation I have received was the one that told me that the Solicitor’s Office will not allow the Patent Office to refuse filings because a scribner could file a patent application for someone who cannot and is the inventor. But LegalZoom files 25,000 trademark applications a year, and about 10,000 provisional patent application a year. At what point does OED actually wise up and enforce its own rules? I suspect never unfortunately.

    I agree that FTC is a better avenue to proceed. They go after invention scams from time to time, and there is plenty that is false in LegalZoom’s advertising. The one that gets most upset is the commercial where they say that one of their clients obtained a provisional patent. That is a marketing decision. I have personally told them that they cannot say that and that there is no such thing as a provisional patent, but that is what they call it because that is what they believe will sell the service. Truly sad that the powers that be don’t seem interested in stopping such activities.

    -Gene

  6. EG February 5, 2009 11:27 am

    Gene,

    Bizarre explanation by the Solicitor, but consistent with the OED’s penchant to “diligently” go after only those who are registered to practice before the PTO (as “stripping” or “suspending” such registration matters to those who have it, but not to those who don’t). The Solicitor doesn’t have to “refuse” the filing; all we’re suggesting is that the Solicitor (and the OED) go after those who aren’t qualified to “practice” before the PTO. Even those who do trademark work before the PTO have to be attorneys licensed to practice in at least one state; it would be fairly easy for the PTO to have those who want to do trademarks before the PTO submit some certification that they’re an attorney in good standing from at least one state. Just bizarre.

  7. Gene Quinn February 5, 2009 11:33 am

    EG-

    There are certainly ways that OED could solve the problem, they are just not interested. This is ridiculous given that just over 12 months ago Harry Moatz threatened in some speeches that he would investigate attorneys who submitted numerous pieces of prior art in applications. So Harry will investigate practitioners who follow the Federal Circuit view of the duty of candor, but at the same time allow companies like LegalZoom, MyCorporation and others represent people and prosecute applications. Something is very wrong about that and I can’t for the life of me understand why attorneys and bar associations are not the least bit upset.

    -Gene

  8. Michael February 7, 2009 12:49 pm

    Why is it when I see attorneys complaining about UPL they rarely have any examples
    of actual harm to the consumer? LegalZoom has filed, let me guess – hundreds of thousands
    of legal documents over the years? How many resulted in “harm” to the consumer? Sure, some
    were defective, but we even accept insect parts-per-million in our food as a reasanable trade off so
    food will be available. Of course, every attorney-prepared document is perfect, isn’t it? All those
    bar complaints notwithstanding. Its all about the monoply (which means its all about the money, for attorneys, that is). Instead of whining because the government won’t protect the guild, why don’t you lower
    your absurd monopoly-supported fees and/ or increase quality-of-service so LegalZoom types will hire
    you? Oh, wait! You don’t want these “low end” clients anyway! Huh?

    Now, does LegalZoom and its ilk sometimes hurt consumers? Of course, but in sum, probably
    much less than the monopoly.

  9. Gene Quinn February 7, 2009 1:07 pm

    Michael-

    So you think it is acceptable for a company offering a service to provide inaccurate information? When you call LegalZoom and ask a legal question you are as likely to get the wrong answer as the right answer. I have called them myself and asked patent related questions, which their customer service people proceeded to answer incorrectly. For example, I asked if there was any detriment to selling prior to filing a patent application. The answer I received was that you don’t need a patent to start selling and you can start selling at any time. If you followed this advice you would instantly lose all possibility of patent rights outside the US, and you would only have 12 months to file in the US. Many customers are told this erroneous information, and many customers are told that they can simply refile and renew their provisional patent applications, which is wrong.

    If you want to work with folks who tell you to do things that will result in the loss of all rights then go for it. America is a free country and people are allowed to make mistakes.

    -Gene

  10. Ed March 25, 2009 10:07 am

    What about using them for a Will?? Is there any real risk in doing that?

  11. Gene Quinn March 28, 2009 6:56 pm

    Ed-

    I have no particular knowledge about LegalZoom wills. I have heard things second hand from attorneys I know who allegedly have seen LegalZoom wills. The thing you need to realize is that using any one-size-fits-all legal service is not the best way to proceed. The law is complicated and everyone has unique situations that should be taken into account.

    Having said this, something is better than nothing, right? I personally believe it is better to have a will than not to have one. If you cannot afford an attorney then you have to do what you can. LegalZoom is pretty cheap, so it could be an option. It is important to understand though that the will you get from LegalZoom is not going to be as good as one you receive from a competent attorney. As long as you are not expecting or fooled into believing you will get exactly what you need, then it might be worth it.

    Before you do you might want to at least talk to an attorney. What LegalZoom says you will save is typically over-inflated, so you might not be saving as much as you think.

    I hope this helps. Good luck to you.

    -Gene

  12. Abraham April 18, 2009 6:17 pm

    Harry moatz appears to be from my own personal experience a dishonest man. His blatent inability to tell the truth on a routine basis leaves the question as to if his actions are based on incompetence or ill will. Either way- it is inexcusable for a man in his position. The PTO needs to find a OED director who’s principles and actions are grounded in honesty and true integrity.. which will only provide richness to the profession at large.

  13. Levi May 1, 2009 12:24 pm

    Just another example of Harry Moatz again putting the “hush hush” approval on true crime and collecting a government salary for sternly slapping the wrist of a practitioner whose shingle fell down in the wind. He and his corrupt office mask themselves by bringing justice to the few, and bringing injustice to the greater majority. He is more of an advocate for fraud that you may know. This guy needs to go… sooner the better. All bullies are cowards, all cowards are liars.

  14. Katy July 30, 2009 8:54 am

    Great article Quinn. What I cannot believe is how nobody is willing to shut them down or at least prohibit LegalZoom from filing trademark applications on behalf of others.

  15. Richard Shea August 4, 2009 5:01 pm

    The evil genius of legalzoom is the loophole of being able to pass themselves off as legal helpers without being subject to any of the discipline rules that licensed attorneys are subject to. Who can stop them? Consumer agencies, and they don’t really care because they probably hate lawyers more than legalzoom. A UPL complaint? All they risk is a cease and desist in one little jurisdiction, not much in the way of punitive damages. It would be nice if the ABA would use its national presence to get a spotlight on these companies from the FTC.

  16. Matthew Pitts January 1, 2010 9:27 pm

    I would have to agree with Michael as well as the author. It is far time that attorneys stopped complaining about Legal Zoom and started competing. Read my new e-book entitled: Legal Zoom Pummeled You in 2009: eLawyering Strategies to Avoid a 2010 Beat Down! @ http://www.elawyer.lendahandlegal.com

  17. P. Smith June 18, 2010 7:08 am

    Now that I have read this, I have discontinued my pursuit of patenting an device through legalzoom. With that said, how do I go about this legitimately? There seems to be a lot of junk on the web and I just don’t want to get burned. Who is trustworthy out there that I may contact?

  18. Gene Quinn June 18, 2010 11:03 am

    P. Smith-

    You have to be careful when you are paying prices below market value. There are a number of provisional patent application services on the web, and I have put together a do it yourself model, but whenever you are going to file without an attorney or agent involved there is risk. Sometimes folks have to cut corners because it is do it themselves or don’t do it at all, so there is no one-size-fits-all advice that anyone can provide.

    What I would suggest is you read the pages of IPWatchdog and become as familiar with patenting as possible. Consider getting Patent It Yourself, which you can get from any bookstore. Also consider getting this book by Professor Janice Mueller:

    http://www.amazon.com/dp/0735578311?tag=ipwatchdogcom&camp=213381&creative=390973&linkCode=as4&creativeASIN=0735578311&adid=15FBEFC7BDFSRX3YG8WY&

    In terms of who can help, I would recommend you gravitate toward a patent agent or patent attorney. Consider finding a local inventors group and see if the inventors can recommend anyone.

    Best of luck to you.

    -Gene

  19. Honest Abe July 17, 2010 9:50 pm

    The dishonorable Harry moatz should be terminated from this office and the DEPT of commerce should knwo the truth. Harry Moatz is shady and professionals who exploit the american inventor get an old pat on the back by the king pin of inventor abuse – Harry Moatz.(Meanwhile he pretends to work on regulations so futile as described above). I know of a practioner who has a history of being financially irresponsible,YEARS OF federal tax liens, has been kicked out of law school for cheating, but passed the patent bar to become an agent,.this person now lies to clients, does not know the law, but remains on Harrys Moatz’s Roster as “practioners in good moral standing:” What a joke. Other practioners who have stolen tens of thousands from a client, and I do mean stolen given the fact that the attorney failed to respond to the first office action, and did not tell the client for THREE Years. A license to practice is NOT license to STEAL, unless Harry Moatz and James Toupin are there to put the stamp of approval on the routine misconduct, which they do. Harry Moatz did nothing,

  20. ca May 8, 2011 11:51 am

    Harry Moatz was removed from office in January 2011

  21. M. Lissett May 22, 2011 12:20 pm

    Legal Zoom is either unauthorized practice of law or gross malpractice. One of the two. I am a lawyer. And I may be filing a complaint with the California Bar or my State bar to investigate. I cannot believe the California Bar lets this organization do business.IIt is an embarrassment to the California Bar .

    Perhaps it will take a Bar Association from a different state to investigate using their unauthorized practice of law division to prosecute civilly, or perhaps criminally. I pressed one star above, but they deserve no star because their activity is unlawful.

    In our case, but it looks like there are hundreds of complaints all over the web, my wife hired them to do her Trademark. They do not let clients know that what they do is the beginning of a process, but imply that it is going to be a completed process when the do their work on the Trademark. After taking fees, Legal Zoom do the preliminary filing.

    Most important they do not inform the client to look to see if the Trademark on the USPTO site is in question after they file. The Trademark could then be declared invalid by USPTO unless a proper response is timely filed.

    The client is not told this, and may invest later in great business expense under a name that is not their Trademark. If the USPTO notice letter is not received by a client from USPTO, the client knows nothing, and thus later can do nothing.

    The fee charged by Legal Zoom ends up being much more than advertised. Additional fees are later surprisingly “needed,” to do more work originaly not made clear in the beginning. Our State Bar association Unauthorized Practice of law Division in our State (and State Attorney General) would have closed Legal Zoom down long ago. We are not in California. And maybe they will have to do it, as California seems to not care about Legal Zoom preying on its struggling public. And I cannot believe Legal Zoom is run by a Lawyer, and the California Bar does nothing. It is likely complaints have been filed.

    I am not a Patent and Trademark attorney, and never did any Trademark work, and I was not in good health at the time, so my wife felt it necessary to seek Legal Zoom’s help. But her complaint is that she was kept in no man’s land on the whole process. Then dumped her in the end after the fee was received.

    Another lawyer does not need to know the Trademark field to be able to witness improper activity, which activity could be seen as a very basic question on any ethics section of any State bar exam.

    Legal Zoom’s website in the fine print, says that they are not providing legal services, when in reality they are, and are stepping into legal work in likely every instance.

    If they defend that it is activity overseen by a lawyer, so not unauthorized practice of law, then the activity is then clearly Malpractice in perhaps thousands of instances. the complaints on the web are significant, and great in number, and one can figure that only one in a hundred who have been harmed have posted a review.Only certain people want to be bothered additionally, and simply take their Legal Zoom losses.

    Other review sites are scary to post on, as they require detailed information on who the reviewer is. Fears of a slander or libel suit cause most to shy away about complaining on the web, or complaining to the Bar for that matter. I think you can see by this review that I know what I am talking about. All should stay away from Legal Zoom.

    Those good reviews you see could just be “plants”. If there are this many bad reviews, a reasonable person should have common sense and stay away from them.They are playing the in between, staying in business in an odd way, taking in millions of dollars and causing likely considerable damages to thousands of people nationwide, for no reason other than profit and greed.

    We are very sorry my wife hired Legal Zoom, as I now have to work hard to see what I can do to clean up their mess. My wife either should have done this Trademark work herself, waited till I felt well enough to do it, or hired a reasonably priced real lawyer.But she says Legal Zoom marketing on TV, and ads on the web pulled her in.

  22. Michael October 1, 2011 11:16 am

    I filed a trademark through Legal Zoom. I was very paranoid about the details and this is my first time filing a trademark. I spent upwards to over $500 to file the trademark and to give myself access to a lawyer to talk about any questions I might have. It It has been 3 months since I filed the application and I have received back an Office Action letter with a TON of things wrong with my application! Legal Zoom and the USPTO says I need to get in touch with a trademark attorney to fix the errors. This is complete bull! I want a refund from Legal Zoom. The major reason why my I am getting an Office Action is because of SECTION 2(e)(1) REFUSAL – MERELY DESCRIPTIVE. Why didn’t the attorney that I spoke with before hand notice that the trademark I was filing was descriptive and tell them that I can not to that!? Can I still file my trademark? I am completely loss and out of money. If I could get someone to look at my Office Letter and tell me how I can get around this as well as over 20 other detailed errors in my description that would be great! Right now I am out of money, out of a job, and really upset.

    Thanks.