For decades scammers have mined the United States Patent and Trademark Office (USPTO) trademark database. These scammers attempt to trick trademark owners into paying excessive fees for unnecessary listing services. These scams have been well-known for years. However, they always create confusion and costs in dealing with the calls and inquires. An advantage of these solicitations is that they embed data from the trademark application itself to create a sense of validity:
The scam process before February 15, 2020
When scammers only had access to the trademark applicant address, they had to resort to hard-copy printing and postage to send their solicitations to the potential victim. The scammers use Applicant address information to circumvent law firm. Circumventing the law firm improves the scammers odds of success. Trademark scams are so prevalent that the USPTO has an entire web page dedicated to educating trademark registrants on how to recognize trademark scam letters and not fall victim to their fraudulent demands.
Things will get worse February 15, 2020
On February 15, 2020, the trademark scam problem just became exponentially worse. The new USPTO rule now requires that every trademark application must provide an email address of the applicant. Why this matters? Because now, instead of just mailing letters demanding payment, scam artists can start sending direct emails with built in links for immediate online payment. Unsuspecting trademark registrants could be defrauded of hundreds or thousands of dollars with just a few quick clicks.
The scam process after February 15, 2020
Previously, with the mailed letter, a potential victim needed to write a check or fill out a credit card payment form. As a result, the trademark owner had a window of opportunity to stop and think about legitimacy of the letter. With direct emails the trademark owner could impulsively pay the demanded fee through online payment. Thus, substantially increasing the success rate of the scam. Furthermore, mail scams entailed barriers and expenses. For example, the perpetrator had to print the scam letters, package the letters, pay for postage, and mail them. The USPTO’s new rule eliminated these barriers. Anyone, in any country, can now directly email scam letters to trademark registrants.
In addition to the significant financial concern, trademark scams are a source of stress and anxiety for trademark holders and an annoyance for their attorneys. A trademark attorney has an ethical duty to educate the clients about trademark scams. If a client falls a victim to a scam, the client will often become disgruntled and may blame the attorney for failing to provide effective warning and guidance to prevent this issue. Numerous—and often unbilled—urgent client calls triggered by the scam letters can disrupt an attorney’s workday. Worse yet, if the attorney is unavailable to immediately address the client’s perceived emergency, the client relationship will quickly erode.