For decades the united States Patent and Trademark Office (USPTO) trademark database has been mined by entities soliciting represented clients to pay for renewal and listing services. These scams have been well-known for years but have always incurred some confusion and cost 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 get their solicitation to the potential victim. It was clear the Applicant was represented by legal counsel but the law firm is always circumvented to better the chance the scam will work. 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 can 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 scam victim would have to write a check or fill out a credit card payment form, creating a window of opportunity to stop and think about legitimacy of the letter. With direct emails, the impulse to pay the demanded fee and an opportunity to satisfy this impulse by making an immediate online payment substantially increase the success rate of the scams. Furthermore, mail scams entailed barriers and expenses—the perpetrator had to print the scam letters, place them in envelopes, pay for postage, and mail them from within the United States. With the new USPTO rule, these barriers are now gone. Anyone, in any country, can now generate trademark scam communications and send them directly to the email address of an unsuspecting trademark registrant, even if that registrant is represented by an attorney.
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.