In early November, a report out of Omaha, NE-based news station KETV detailed a story about a local coffee shop facing an unintended consequence of trying to protect intellectual property rights. After trademarking the cafe’s name, the owners of Muglife Coffee began receiving letters asking for money to list Muglife’s trademark on international registries. Although the registries were asking for more than $2,500 to list the trademark, an attorney for Muglife advised the owners not to pay because the registry was meaningless.
The U.S. Patent and Trademark Office’s official website warns trademark owners about private companies who conduct trademark scams. These schemes involve companies, many of which use names intended to confuse people into an association with the USPTO, who make offers for legal services, trademark monitoring services, recording trademarks with U.S. Customs and Border Protection or registering the trademarks in a private registry. On its warning page, the USPTO maintains a list of a couple dozen such companies whose scamming activities are known.
Such payment scams, which take advantage of unwitting business owners is not simply an American problem. As the World Intellectual Property Organization notes, warnings about scams involving fraudulent registration services have been issued by 15 patent and trademark offices, including those in Germany, the United Kingdom, Austria, Switzerland, New Zealand and the European Patent Office.
Trademark is not the only area of intellectual property where businesses may be vulnerable to scams. Many readers will be familiar with the idea of patent trolling, a type of scam in which businesses, many of them small businesses, receive demand letters from patent owners claiming that their business activities constitute patent infringement. There are some important differences in these cases, however, including the fact that victims of a trademark registry scam actually own the IP and aren’t having IP rights asserted against them, but both scams rely on the victim having enough legal knowledge to spot dubious claims.
Domain name scams also share some characteristics with schemes to defraud trademark owners of money through fake service offers. Last May, UK’s The Guardian published a tech column which discussed an instance of a person who, after registering a .com domain name for a website, received offers to claim the domain name in other foreign domains, such as China’s .cn domain. In this case, the person targeted was registering a personal name and not a business name but the act of registering the domain name makes certain contact information publicly available, the same information which is leveraged for trademark service schemes. If a business is actually interested in perhaps competing in a foreign market and receives such a letter for domain name registry, it’s a much better idea to register the domain name legally through a country’s official domain name registrar. For China, that organization is the China Internet Network Information Center.
Unnecessary trademark services are offered to business entities all over the world and those offers come from both domestic and international firms. The USPTO’s warning page lists organizations sending legal service offers from American cities like Los Angeles, New York City, Washington, DC, and Alexandria. Many services are also offered by firms overseas in countries such as the Czech Republic, Hungary, Poland, and even one company in the UK capital of London. Of course, these are the locations of known companies offering services which have already been targeted by a complaint, so this list is likely not an exhaustive one.
As the USPTO notes, there is no avenue for obtaining a refund from private firms providing such services. Some of the conduct is not technically illegal; even if it’s worthless to a business to register a trademark with one of these unnecessary registries, offering such a registry isn’t illegal on its face. However, the USPTO does suggest that anyone who has been targeted by such trademark schemes reach out to the Federal Trade Commission (FTC), which accepts complaints from U.S. consumers about abusive or fraudulent business practices. Individual complaints aren’t resolved by the agency, but the FTC can institute investigations into business practices if the agency receives enough complaints on a certain matter. Also, business owners can register complaints about trademark service scams with their state’s consumer protection agency or authority. The USPTO claims that many states have mechanisms in place to conduct investigative activities into deceptive business practices which target residents of the state.