Common Trademark Scams

Trademark scams have been around for some time, so much so that the USPTO has long warned against such misinformation and regularly offers formal notice and warning to consumers through its website. See, e.g., https://www.uspto.gov/subscription-center/2020/beware-email-scams. These scams come in many forms—from an email or letter claiming a third party is attempting to register your company name or brand, to fake invoices, domain name scams, or even phone calls—all of which claim to be from the USPTO or some other trademark expert. And while some are obvious, with misspelled words or improper grammar that are likely to put one on guard, others are much harder to identify.

Within the past year, we’ve seen an increase in both the number and sophistication of the scams in circulation, making it more difficult for companies to detect what they should—and should not—pay attention to. The best practice is to always follow up with your trusted trademark counsel when a communication raises red flags. But how can you tell when a notification does not pass the sniff test? Below is a summary of the more common types of trademark scams and tips to help you detect them.

Emails or Letters Warning of Risk to Your Unregistered Company Name or Brand

In recent months, we’ve seen an increase in scam emails or letters sent directly to a company claiming that a third party is attempting to register the company’s unregistered name or brand.  These letters are unsolicited and have predictable patterns and similarities that will alert you to the scam.

1) They are sent by someone claiming to be an attorney or other expert in the field of trademarks.

Often, in-house counsel and company executives receive an email or written communication from someone claiming to be an attorney or other expert in the field of trademarks. The sender may (or may not) be an actual attorney. In some cases, the sender actually is a licensed attorney but is offering information that is misleading at best.  In other cases, the sender is not actually licensed to practice law or may even be a fictitious person. We’ve even seen instances where the sender claims “I am writing to you on behalf of the legal department of USPTO Trademark US.” This is a clear red flag as the USPTO does not complete or submit trademark applications on behalf of consumers and does not reach out to consumers in response to pending and unrelated, third-party applications.  In short, if the communication is requesting you contact the sender to assist you with the filing of a specific trademark such as your business name, you should investigate further. You can also access a growing list of fake government entities identified by the USPTO in ongoing scams to see if the sender is listed.  See https://www.uspto.gov/trademarks/protect/examples-fraudulent-misleading-solicitations.

2) They claim to have received a third-party application to register your company name or brand.

Another commonality among the more recent scams is the claim that the sender has learned that a third-party plans to file an application to register a trademark for your company name or brand or common-law trademark. Below are a few representative examples:

The sender will state that his or her “research” has identified that your company name or brand is not federally registered with the USPTO and will imply—if not declare outright—that your company name or brand is at risk.

Having baited the hook, the sender will inform you that if you do not contact them for their assistance (presumably at significant cost), you will be at risk of any number of unpleasant results ranging from the inability to register or even use your company name or common law mark to the potential that you could be penalized for infringement of the mark if the third party is successful in obtaining registration. Such “dire” warnings may include language similar to the following:

Often, the sender will imply that if you contact them, they will abandon their efforts to assist the “third-party” in registering the same name:

Almost uniformly, the sender will offer a short time for responding – typically 48 to 72 hours – in order to “protect” your rights. And while such scams in the past would focus on businesses already in the USPTO registry, these newer scams appear to focus on businesses of all sizes and likely obtain their information from business and corporate filings rather than USPTO traffic.

Keep in mind:  the USPTO will never contact you for payment or the exchange of sensitive information via phone, text, or email and will never require payment via check or wire to third-party addresses. 

3) The claims in the notification are misleading at best.

Perhaps the most concerning aspect of these most recent scams is the inclusion of misleading information. For example, quite a number of the notifications include a bolded statement to the effect that “It is important to note that, as stipulated in the Act of 1946, specifically §§ 1051 et seq, federal registration of your mark is essential to establish and protect your ownership rights.” While it is true that the USPTO follows a “first to file” procedure, this statement is misleading, at best, because it ignores the basic principle that trademark rights arise out of use, not registration. This means that in the U.S., rights to a trademark arise out of the actual use of the mark on or in connection with goods or services in commerce. In fact, even the USPTO requires actual use of a filed-for mark before the mark can obtain final registration.

Thus, while the first person to file to register a mark with the USPTO will receive initial consideration for purposes of registration, a party claiming the mark earlier in commerce (known in the trademark arena as “priority”) can impact a subsequent user’s attempts to register a mark. In other words, if your company name or brand is already in use as a trademark, you have common-law rights in and to the mark that may afford you priority over another party seeking to register the mark, provided your use is in interstate commerce and predates the use claimed by the third party. Such determinations are frequently complicated, but are not based on federal registration alone

4)  What to do if you receive these notifications:

While the tips listed above can help you identify trademarks scams—and alleviate any anxiety that may be caused by receiving such a notification—your best bet is to always follow up with trusted trademark counsel to confirm there is no need for action. It is especially important that you do not respond to potential scams, as providing additional information could put your company at greater risk of further scams or fraudulent activity.

Once you have confirmed the scam, you may also want to consider reporting the sender to the Better Business Bureau, the State Bar for the particular state, the Federal Trade Commission, or the Federal Communications Commission. It is likely the recent increase in these types of scams stems from the fact that the scammers (1) often operate with impunity; and (2) are successful enough to outweigh the risk they will be reported. The USPTO offers a list of potential actions you can take against scammers, including important websites for reporting bad actors, located at https://www.uspto.gov/trademarks/protect/what-to-do-if-youve-been-scammed.

Offers to Sell a Domain Name “Out From Under” a Third Party

Data submitted to the USPTO is publicly available. And while that information typically is used for many legitimate purposes, it is also accessed by scammers peddling highly questionable or non-existent goods and services, including domain names. Recently, we’ve been made aware of scammers contacting businesses who have recently filed new applications to register trademarks with the USPTO. The scammers will report that a third party has “applied” to file a top-level domain incorporating the trademark or business name of the subject of your recent application and will offer to intervene or otherwise obtain the domain name registration for you before the third-party application can be “approved.” As an initial matter, the domain name offered may not exist, may not have much value in the marketplace, and/or the scammer may not even be able to register the domain as offered.  Regardless, domains are registered at the time they are ordered—there is no “application” or “approval” process. Even if the domain name exists, if a third party has, in fact, registered your trademark or business name in a domain name, the scammer cannot “intervene” and paying them accomplishes nothing apart from a payout to the scammer.

Another variation of this scheme is for scammers to monitor recent filings at the USPTO and then offer to sell a recent applicant a domain name incorporating the trademark in order to “secure an online presence” associated with the newly filed trademark. The offer typically comes at an inflated price, claiming a rare opportunity or limited availability. As with the above example, in reality, (1) the domain name may not even be available; (2) the “seller” may not even have the ability to transfer the domain; (3) if available, the domain likely can be obtained through a legitimate registrar for less money; and (4) the domain may not be as valuable as claimed.

These domain name scams can take a variety of forms, but generally are crafted to create a sense of urgency based on alleged imminent infringement or a possible missed opportunity. Some are phishing for additional information specific to your company, which can then be used or sold for further scamming efforts, while others are looking for a quick pay-out. The best practice is to use well-known and reputable domain name registrars (like GoDaddy) and be wary of claims of urgency. Most importantly, do not respond to these emails or click any links included in the email itself. Instead, contact reputable trademark counsel for their review, or even search the offered domain name through a reputable registrar to obtain additional information.

False Invoices

Another iteration of the trademark scam involves fake invoices. In some cases, scammers monitor USPTO filings for new applications, then send false invoices to the trademark applicant, claiming additional fees are owed to the USPTO in order to allow their application to be filed and processed. These claims are false, as the USPTO will never request payment over the phone or via text or email. Moreover, all fees owed to the USPTO are paid at the time of filing through the USPTO’s electronic filing system (either by your retained counsel if you have one or by the company if filing on its own).

A recent variation of this scheme involves scammers monitoring USPTO records for upcoming maintenance and renewal deadlines, which arise long after the initial registration. Trademark renewals and maintenance submissions are due between the fifth and sixth year after registration and every ten years after that. This means that the initial maintenance and renewal windows open at the beginning of the fifth year after registration and allow the registrant the entire year from that date to complete all maintenance. In recent months, we’ve seen false invoices issued by someone claiming to be the USPTO or another governmental entity, or even an attorney, stating that the recipient’s registered trademark(s) is due for renewal and the recipient must make immediate payment to preserve the mark(s). These invoices are often sent just prior to the maintenance window opening and before your attorney of record has contacted you about the upcoming deadline. These scams ignore the one-year window for maintenance and seek to create a sense of urgency that you will lose your federal registration if you do not pay the invoice immediately. In many cases, the invoices are for significant amounts—one we encountered recently (that unfortunately was paid before we were notified) was in excess of $20,000.  And as the senders usually are fake entities using fake addresses, it is almost impossible to recover a mistaken payment. 

If you believe you have received a fake invoice, take care not to click on any links in the invoice or cover email and certainly do not scan any QR codes included in the invoice or correspondence. Rather, contact your trademark attorney and have them review the information. Alternatively, use your registration number(s) to review the status of your registered mark(s) at the USPTO’s TSDR website located at https://tsdr.uspto.gov/ to confirm maintenance deadlines. You can also contact the USPTO’s Trademark Assistance Center (“TAC”) for additional help. See https://www.uspto.gov/learning-and-resources/support-centers/trademark-assistance-center.

Caller ID Spoofing

Spoofing is when a caller deliberately falsifies the information shown on your caller ID display to disguise their identity. In the trademark context, scammers spoof well-known main phone numbers at the USPTO so that it appears the call is coming directly from the USPTO. When you answer the phone, the scammer will utilize many of the same processes identified above—claiming immediate payment is due for registration or maintenance fees related to your trademark(s) and advising that your intellectual property rights will be “lost” or “at risk” if you do not make an immediate payment over the phone or otherwise provide them with sensitive information that can be used against your company in future scamming attempts or other fraudulent activity. This scheme usually targets businesses with current registrations or pending applications with the USPTO but may also focus on new businesses who are prospective applicants. Scammers will claim to be employees or even Examining Attorneys with the USPTO and will seek to create a false sense of urgency to “preserve” your intellectual property rights.  The most spoofed numbers are 571-272-1000 or 800-786-9199, which will falsely appear as coming from Alexandria, VA, the location of the USPTO headquarters. Scammers may request excessive fees for unnecessary or even nonsensical services.

If you receive one of these calls, you can always ask that the caller provide their USPTO staff number so that you can hang up and call them back at the official USPTO phone number, then follow up with trusted trademark counsel to ensure all is in order. It can also be helpful if you report such calls to the Federal Communications Commission at https://www.fcc.gov/, as the FCC currently is looking at measures to eliminate this type of threat to consumers and businesses.

Conclusion

While trademark scams appear to be on the rise, in both occurrence and sophistication, there are steps you can take to identify these scams and protect yourself and your company.  In general, beware of communications purportedly coming directly from the USPTO or other governmental entities or even alleged attorneys with whom you have had no prior contact, especially when those communications seek to create a sense of urgency and request payment or the exchange of sensitive information. Immediately reaching out to trusted IP counsel can also prove useful. Alternatively, the following links may offer additional assistance:

• https://www.uspto.gov/trademarks/protect/recognizing-common-scams

• https://www.uspto.gov/trademarks/protect/examples-fraudulent-misleading-solicitations.

• https://www.uspto.gov/learning-and-resources/support-centers/trademark-assistance-center 

• https://tsdr.uspto.gov/ 

• https://www.uspto.gov/trademarks/protect/what-to-do-if-youve-been-scammed

• https://www.ftc.gov/

• https://www.fcc.gov/

Trademark Scam Examples (Click to enlarge)

Klemchuk PLLC is a leading IP law firm based in Dallas, Texas, focusing on litigation, anti-counterfeiting, trademarks, patents, and business law. Our experienced attorneys assist clients in safeguarding innovation and expanding market share through strategic investments in intellectual property.

This article is provided for informational purposes only and does not constitute legal advice. For guidance on specific legal matters under federal, state, or local laws, please consult with our IP Lawyers.

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