The multi-count Federal Complaint filed in April 2013 alleged that the defendants marketed their promotional materials to cause consumers to wrongly believe that it is an official governmental entity. The complaint asserted 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 explained 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.
Although state law claims for unfair competition were dismissed from the case, claims against Patent & Trademark Agency for deceptive business practices, false advertising and tortious interference with prospective economic relation will move forward.
In the motion to dismiss, PTA only sought the dismissal of Count I, a claim for false association and/or trademark infringement. It did not seek to dismiss Count II, a claim filed by Leason Ellis for false advertising. Both of the claims have been asserted by Leason Ellis under the terms of the Lanham Act, the primary statute of law regarding trademarks in the United States. PTA was successful in having the state law claim for unfair competition under New York common law dismissed; the court decided that that, although PTA does conflate itself with the USPTO, PTA doesn’t try to deceive consumers by posing as the plaintiff, which would have supported that claim. However, the court agreed with the plaintiff and will allow its claims under New York General Business Law Section 349, which prohibits deceptive practices in business, and Section 350, which prohibits false advertising of goods or services within the state, to continue in the case.
IPWatchdog.com knows first hand that these types of activities are rampant because we receive these same solicitations all the time with respect to our own federally registered trademarks. They almost always seem official, look like bills that need to be paid, and seem extremely misleading. Those unfamiliar with the process could, and do, easily fall prey to these types of deceptive business practices.
Here at IPWatchdog, we covered the original complaint from Leason Ellis against Patent & Trademark Agency (PTA) and Armens Organesjans, a citizen of Latvia believed to be the operator of PTA. PTA advertises itself through its website and mailings as a business qualified to offer legal advice and services for the renewal of trademarks through the U.S. Patent and Trademark Office; the company’s website and solicitations mailed to trademark owners have both been entered as evidence in the case.
It’s not just that PTA is advertising itself as qualified to give the kind of legal advice and representation that a trademark holder needs when it’s not, says Leason Ellis LLP partner Peter Sloane. Most of the trademark renewals which have been filed by PTA are largely unchanged from the original trademark filing, which might not account for new products or services using the trademark. “Maintaining [the filing of declaration of use] as is with no change opens up consumers to charges of fraud at the PTO,” said Sloane. “They’re not giving the proper legal guidance when, in fact, a registration might be vulnerable to attack.” Filing a declaration of use which doesn’t account for new goods or services using a trademark, or still includes goods and services which no longer use the trademark, puts a consumer at risk. Additionally, he said, PTA is misleading trademark owners by mistakenly referring to a Declaration of Use, which is filed between the 5th and 6th years after a trademark is first registered, as a Renewal, which is filed between the 9th and 10th years after registration.
Leason Ellis Policing the Trademark World
This is the second such lawsuit filed by Leason Ellis LLP against a malevolent actor operating in the world of U.S. trademarks. Here at IPWatchdog, we’ve also covered one other similar case filed by Leason Ellis LLP, a suit filed against USA Trademark Enterprises which ended with a consent judgment against the defendant. That case also included a business entity duping consumers into assuming that it was a government agency. USA Trademark Enterprises also marketed a catalog of trademark registrations, selling a product which was available for free online through the USPTO’s online records.
According to Peter Sloane, the trademark industry is currently rife with this type of false advertising and improper representation. “It’s prolific,” he said. “You can ask any trademark lawyer, they’ve received or their clients have received stuff like PTA notifications.” The ability of those with malicious business intents to deceive consumers into assuming they have legal standing to handle trademark representation has grown through the use of websites, solicitous mailings which aim to take advantage of filing deadlines and business names which hearken to official government agencies.
In taking on these legal battles, the hope on behalf of Leason Ellis LLP is that more individuals and organizations would take a stand against predatory business practices related to trademark registrations. Since taking on their first case against USA Trademark Enterprises, they’ve seen the situation proliferate, and Sloane noted that PTA and Armens Organesjans is mounting a stiffer defense than their previous courtroom opponent. Still, the firm definitely sees the recent decision to throw out most of PTA’s motion to dismiss claims as a major victory. “We see the decision as a victory vindicating our most important claims,” said Sloane. “The bottom line is that the case will move forward.” This certainly is good news for anyone looking to see fairer business practices established for those navigating the legal requirements involved with U.S. trademark registration.