Time to fight back: as law firm files suit against trademark solicitation operator, industry urged to do more 12 Jul 17
Leason Ellis has filed a lawsuit against the Patent and Trademark Association (PTMA), alleging that it is seeking to confuse trademark owners into purchasing listings on a private trademark database that “provides no extrinsic value”. The move is the latest in a continued effort against trademark solicitation campaigns, with a new call for coordinated action between governmental actors, associations and private practitioners in a bid to combat a worsening problem.
The phenomenon of trademark solicitation scams – in which a letter or email seemingly from an official trademark office or association, often designed to look like an official invoice, seeks to solicit payment for the registration or recordal of the mark on a private database – is not a new one. In March, on his blog, Erik Pelton of Erik M. Pelton & Associates posted a warning about the specific register operated by the PTMA, noting that the address listed on their website appears to be a UPS store in New Jersey. Observing that the cited cost for publishing details of a trademark in the private register is $755 for two years, he asked: “I wonder how many people have been duped?” A search of the PTMA register online presents details of 908 marks – if they have all paid $755 for inclusion that equates to $685,540 in fees.
This week, Leason Ellis filed an unfair competition and false advertising action with the District Court for the Southern District of New York against the organisation, alleging that PTMA is “seeking to confuse trademark owners into purchasing services under false color of authority”, having “selected the name Patent & Trademark Association’ to make it seem like an official organisation or an authorised entity affiliated with the USPTO. While creating “a look and feel that is designed to induce the trademark owner to submitting a payment to be listed on a PTMA database", the filing states that the latter “provides no extrinsic value”.
It goes on to contend that “the marketing and sale of trademark related services by PTMA create a false and deceptive representation of equivalence with the legitimate trademark-related services provided by those such as [the] plaintiff”. In terms of relief, the firm is requesting that PTMA be permanently enjoined and restrained from advertising, promoting, soliciting, and selling any trademark or other intellectual property related services. It is also seeking damages.
Expanding on why the firm felt compelled to act, Peter S Sloane, the chair of the trademark and copyright practice at Leason Ellis, told World Trademark Review: “The bottom line is that clients have limited amount of funds to spend on trademarks and if they spend it on fake publications like PTMA then they have less to spend on more legitimate services which actually provide some benefit like trademark watching. As a result, they are competitors for limited trademark dollars and they are acting unscrupulously against generally unsophisticated trademark owners. Why should people spend money on trademarks if they think that it is all just a scam? It undermines the integrity of, and confidence in, the trademark process and that it something that we as trademark practitioners should all be very concerned about.”
World Trademark Review contacted PTMA for comment and will update this blog if received.
This is not the first time that Leason Ellis has taken action against the organisers of solicitation campaigns – in 2014, for example, it obtained a New York federal court judgment permanently stopping Patent & Trademark Agency LLC from providing trademark registration or renewal services. However, Sloane is calling for more action to be taken by others, stating: “We were hoping for more action by the government and others by now, so it has been frustrating watching the problem continue to worsen.”
For its part, the USPTO – which has included PTMA on its list of entities making trademark-related solicitations – has previously stated that it lacks independent investigatory and litigation authority. However, it collaborates with other agencies and encourages those that have been misled into making payments to file a consumer complaint with the Federal Trade Commission (FTC), as well as their states' consumer protection authorities. There have been notable successes in these inter-agency efforts. In March, for example, the Department of Justice announced that the former manager of a Wells Fargo branch in California had been convicted of money laundering and false bank entry charges in connection with laundering the proceeds of a trademark scam. However, the problem persists and Sloane is calling for more concerted action.
Later this month – on July 26 – the USPTO and Trademark Public Advisory Committee are hosting a roundtable to strategise on how to tackle fraudulent solicitations. Sloane will be attending, telling us: “I plan to share my experience as a trademark lawyer who has dealt with confusion among my clients and who has filed civil actions on behalf of my firm against scammers to address their false advertising, unfair competition, interference in our business relationships and, in some cases, unauthorised practice of law. One of the things I am interested in hearing at the roundtable is why the USPTO has not taken more aggressive action against those scammers using official sounding names and sending official looking documents by filing civil actions or even just domain name arbitrations. It is beyond doubt to those of us in the industry that these businesses are trying to confuse consumers into thinking that they are PTO or some other governmental entity, which is also unfair to those of us who are legitimately qualified to practice before the office.”
Despite the growing nature of the problem, Sloane does strike an optimistic note when asked if victory in such efforts is possible, concluding: “I do not think it is as much a matter of ‘whac-a-mole’ as it is with counterfeit products where the supply of product seems inexhaustible. There are only so many of these scammers and I think that it is possible to put many or most of them out of business if the industry takes concerted action to address the problem. Among other things, there needs to be active coordination between governmental actors, trademark associations and private practitioners in the US and Europe.”
The Federal Trade Commission, Department of Justice, US Postal Inspection Service and Customs and Border Patrol have been invited to participate in the roundtable, as well as major bar groups, including INTA, have been invited to share their experiences at the USPTO roundtable. The hope is that a meaningful action plan will be the result.
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