It’s only a matter of time. If you own a trademark application or registration, at some point, you are going to receive a fraudulent request to make a payment or take some other unnecessary action relating to the trademark or a related domain name. At first glance, these fraudulent requests may appear legitimate, but they are invariably scams of one sort or another. The following outlines how to avoid the most common scams.
The Fraudulent Trademark Invoice Scam
The most common trademark scam is the fraudulent invoice scam. This scam, which usually involves U.S. trademarks (but sometimes involves foreign trademarks), is very simple. The scammers send invoices to trademark owners indicating that some action must be undertaken in connection with the owner’s applications or registrations, such as “publication,” “registration,” “renewal,” or “recordation,” and that, if payment is not sent by a certain date, the trademark owner’s rights will be adversely affected. The invoices are usually for about $500-$2000.
Many trademark owners pay these fraudulent invoices because they tend to look authentic. The invoices often use official sounding names, such as the “United States Trademark Maintenance Service,” the “Patent and Trademark Organization,” and the “Trademark Office, Ltd.” One scammer even uses the name “Patent & Trademark Office,” which is virtually identical to the official name of the real Patent and Trademark Office. In addition, the invoices often include the details of the trademark owner’s applications and registrations, such as the filing date, application number, registration date, and registration number.
However, none of these invoices are authentic. They are fakes, and paying them will not benefit the trademark owner in any way. The scammers will take the trademark owner’s money, and in most cases, they will not do anything in return. Moreover, if a trademark owner pays a fraudulent invoice, there is little or no recourse. Most scammers are located abroad, and as a result, there is usually no way to contact them or take action against them. One scammer, operating under the names “Trademark Clearance Center” and “Trademark Compliance Office,” was recently prosecuted. However, this is the first time a trademark scammer has ever been prosecuted, and while the scammer was in business, he is believed to have collected $1.85 million over a two-year span. Clearly, trademark scammers operate with near impunity, and thousands of trademark owners pay their fraudulent invoices every year.
The only way to avoid falling prey to this scam is to refrain from paying any trademark invoices from unknown sources, no matter how authentic they may seem. Such invoices cannot possibly be authentic for the simple reason that legitimate requests for payment will only come from the PTO or the trademark owner’s attorney. All official correspondence relating to U.S. trademark applications and registrations will be from the “United States Patent and Trademark Office” in Alexandria, Virginia, and if by email, from the domain “@uspto.gov.” Such correspondence will be delivered directly to the trademark owner (if an attorney is not identified in the application or registration) or to the trademark owner’s attorney (if an attorney has been identified). Moreover, the PTO will never send a trademark owner or the owner’s attorney an invoice. PTO fees are almost always due when documents are filed, and if additional payment is ever required, the trademark owner or the owner’s attorney will be notified through a PTO “Office Action,” not an invoice. In brief, any request for payment that does not come from the PTO or the trademark owner’s attorney is, by definition, fraudulent.
The Foreign Domain Name Registrar Scam
The most common domain name scam is the foreign registrar scam. This scam involves emails from foreign domain name registrars (foreign companies authorized to register country-code top-level domains, such as .cn for China), or companies purporting to be foreign name registrars, alerting trademark owners that foreign companies are seeking to register domain names incorporating the marks. The emails typically indicate that the registrars are aware of the trademark owners’ rights, that they have placed the domain names on hold for a brief period of time to give the owners an opportunity to register the names, and that, if the owners fail to act, the names will be registered to the foreign company. Basically, the registrars are attempting to pressure trademark owners into buying the domain names by misleading the owners into believing foreign companies are trying to purchase the names. Numerous trademark owners have been tricked by this scam, especially when the emails are from registrars who operate authentic-looking websites, which tends to cause the owners to let their guard down.
Sometimes the scammers register the foreign domain names, and sometimes they disappear after receiving payment. However, even when trademark owners acquire the names, they are usually purchased at inflated prices. Moreover, the purchases are often unnecessary. No one is attempting to register the foreign domain names, and as a result, there is no reason to register them. This is not to say that trademark owners should never register foreign domain names—they should register such names if doing so makes commercial sense—but there is no need to register the names as a result of this scam.
The best defense against this scam is simply to ignore all emails from unknown sources containing warnings about the registration of foreign domain names, no matter how authentic the emails or the companies sending the emails may seem. The clearest indication that the emails are fakes is that they indicate the registrar is aware of the trademark owner’s rights and has placed the foreign domain name registrations on hold. Domain name registrars do not research whether anyone has prior rights in a domain name, and there is no procedure for placing holds on domain name registrations. As in the United States, foreign domain names are registered on a first come, first served basis. Further, in most cases, domain name disputes can only be resolved through the arbitration procedures set forth in domain name registration agreements. Another sign that the emails are fakes is that the cost of the foreign domain names is several times higher than the usual domain name price of about $10-$20. Finally, the emails usually contain generic salutations, such as “Dear Sirs,” and they tend to be poorly written. Any emails meeting some or all of these criteria are scams.
Questions About Scams
The fraudulent invoice and foreign registrar scams are the most common trademark and domain name scams, but there are many others. If you have any questions about whether a particular invoice or email is a scam, it should be treated with caution and you should contact an attorney before responding.