Archive

patents

Be on the lookout for Intellectual Property (IP) and domain name-related schemes specifically designed to get you to needlessly part with your cash. If you registered a trademark, copyright or patent or if you own a website domain, there are number of deceptive marketing practices that some of you may fall prey to if you are not aware that they are actually scams.

What you need to know…

When you file a trademark, patent or copyright with the US Patent and Trademark Office, US Copyright Office or other IP-related government entities, your application becomes public information and anyone can access these databases. So-called marketing companies take your information and then solicit their victims via email or regular mail for services seemingly related to intellectual property or domain name registrations – services that you don’t actually need.

The solicitations may include:

(1) Offers for legal services to file your IP in another country.

(2) Trademark monitoring services

(3) Invoices for renewals (coinciding with your registration dates)

(4) Recordation fees for trademark registration with U.S. Customs and Border Protection

(5) Offers to include your trademark listing on private registries or directories

(6) Invoices for foreign registration

(7) Notifications that an unauthorized 3rd party seeking to register your trademark or domain and will be approved unless you respond and pay the listed fees

These companies send out notices and invoices under official looking letterhead and often times, use government sounding names such as the “TM-Collection – International Register of Trademarks-Hungary,” The Asian Domain Registration Service” or “US Customs and Border Protection (CBP) Bureau.” Oftentimes they use scare tactics such as:

another company is attempting to register your intellectual property in their country and that if you do not respond, we will assume you have authorized this registration. Click here for more information on this scam.

Other times these scammers will simply send you an invoice in order for you to register your trademark from Hungary, for example, (in the amount of $1650.00 or otherwise be advised that you that you will lose your rights to register in the future).  Again, the solicitations are worded in such a way so as to appear that these fees are an ordinary charge and that you are obligated to pay to protect your intellectual property.

Alternatively, victims who already own a “.com” domain name are warned by so-called international domain registries that they need to buy all of the other variations from .net, .biz, .cn ,etc. in order to protect their trademarks within their countries. The truth is that you don’t need the help of these officious third parties as you can easily register alternative domains yourself with reputable registrars in your home country for a few dollars each a year.

If you receive any kind of renewal or listing notice, here are the six basic things you should do to avoid a scam:

  • Check the source of the official correspondence – communication from the USPTO will either come from an address in Alexandria, Virginia or an email return address would end in “@uspto.gov.”
  • Research the exact name of the organization that sent out the invoice and see whether they show up on any watch lists (or simple google their names)
  • Read every word of the document. If it’s a “legal” trick, it will say somewhere (even in very small print) that it’s a solicitation, not an official invoice. You will probably note bad grammar and misspelled words in the solicitation as well.
  • Know the normal maintenance filing deadlines and requirements associated with a U.S. Trademark — which typically occur between the 5th and 6th year after registration and again between the 9th and 10th year.
  • Trust your instinct. Maybe the due date seems too soon? Maybe the due date has already passed? Maybe the details in the “notice” are limited and include no contact phone number?
  • Work with your lawyer or other provider to help verify the authenticity and accuracy of any invoice or before paying it.

IP scams have become so rampant that that government entities have begun issuing warnings to advise intellectual property holders to be aware. Click here for the USPTO official warning. The World Intellectual Property Office also maintains a database containing samples of scam letters and invoices. Click here for samples of these “scam” invoices. You may also file an online consumer complaint with the Federal Trade Commission www.FTC.gov and/or email the USPTO @ TMFeedback@uspto.gov.

Readers, be on your guard for this new surge in patent, trademark and domain registration scams deigned to trick inventors and businesses into paying hundreds or even thousands of dollars for bogus services.  Feel free to email or comment on this post if you’d been the target of one of these scammers.

Advertisements

Global reach of the Internet means that sellers of counterfeit goods can reach consumers like never before. For this reason, you will want to protect your goods with patents and/or trademarks in those countries you will be selling, manufacturing or developing your products or services. The biggest violators are based in China, Indonesia, Taiwan and Mexico; with cheaper labor available, they are manufacturing knock-offs and selling to customers in your most lucrative markets.

Even if you’ve taken every precaution to file trademarks and patents…what happens when you find out your goods have been counterfeited or your trademark has been misappropriated?

I represented a company whose goods were being knocked off by a manufacturer in China. The freight forwarder erroneously sent us a copy of the counterfeiter’s bill of lading– identifying the goods under my client’s trademarked name. The bill of lading revealed that over $100,000 of pirated goods were being shipped F.O.B. Hong Kong to several international destinations.

As this product was both patented and trademarked, I contacted Customs in Hong Kong and reported the infringing activity — I thought we could easily have the pirated goods seized at the port. It turns out that even with proof in hand, in order to seize goods, a deposit of over $250,000 would be required for Customs to take any action – more than the value of the shipment! If the goods were found to be non-infringing, a portion of that money would go back to the owner of the goods to pay for his damages and inconvenience.

In any event, this money would be tied up for months, if not longer, while an investigation would be conducted – comparing the goods with the patent claims to determine whether they infringed upon my client’s patents. Comparatively, we learned that it would be easier to claim trademark infringement because a trademark could be visually evaluated (though damages for trademark infringement are significantly less than for patents).

After several weeks of haggling with Hong Kong Customs with no results, I decided to take a drastic measure and contact the Hong Kong police to report a theft and, at the same time hired local counsel to file an injunction (an order issued by a court that forces someone to do something or stop doing something  — in this instance, it stopped the agent from shipping out the goods to his customers).  This method proved most effective; we were able to successfully seize the goods and the Police notified the manufacturer’s local representative that the goods would be held (at a hefty daily storage charge) until the matter was decided.

I contacted the local agent and, in the style of Vito Corleone, made him an offer he couldn’t refuse:
“Tell your boss that we are willing to release all claims provided:                                                          —all profits on this shipment get paid directly to us.                                                                          –we will release the goods to you so you can forward them on to your customers in order for you to get paid.  However, we will require your company to sign a manufacturing/distribution agreement with monthly guaranteed minimums under a long-term contract commitment .”

 Note: We had to assume they were still making the goods and had new orders to fill; since the goods were of high quality, we decided to take the approach that if you can’t beat ’em, join ’em — as a result of this relationship, over the next few years, my client grew his profits significantly.

While not everyone is so lucky as to be handed information that leads them directly to their counterfeiters, by monitoring the Internet (particularly wholesale sites) you may be able to uncover proof that unauthorized sellers are pirating your goods. In some cases you may want to stop the counterfeiting and sue for damages —  in others, you may want to negotiate. Contact a lawyer to help you strategize and take action – sometimes they will work on a success-fee basis.

Take-aways:
1. While patents are more valuable than trademarks, it’s easier to catch a thief based on appearance (trademark/packaging) rather than functionality.
2. Trademark filings are more nuanced that many people think. In addition to performing a trademark similarly search, classifying goods and services and determining where to file are other important considerations.
3. Don’t spend the money until you need to – start with a single trademark/patent and file in other countries when you start doing business there; you can still claim the date of first use based on your original trademark filing.
4. Ballpark costs

  • Trademarks: $1,200 to $1,800 to hire a lawyer to handle the initial filing
  • Provisional Patents: Approx. $1,500-$2,500 depending on complexity (gives you 1 year to market your product/service before filing a full blown patent application)
  • Patents: Costs up to $10,000 for a utility patent and $5,000 for a design patent

Note: Ask your lawyer to prepare an international patent/ trademark strategy that coincides with your rollout schedule for your budgeting purposes.   

5. Having a registered trademark can help you take control over bad actors that register a domain name using your trademarked name (e.g. .net, .biz, .cn, etc) more on this later…                                   6. Remember to use the ™ symbol next to your trademark while it is pending approval and the ® symbol after you have registered it.

In my next blog, “Davy vs. Goliath” I’ll share my experience from the other side of the table – defending a trademark owner against threatened litigation. Thoughts? Comments?

This article is not intended to constitute legal advice or to take the place of conferring with your own attorney.

©2012 Paula Brillson. All Rights Reserved

NEWMAR Fire

DON'T BE A VICTIM OF NEWMAR RV CORP

Digital Law Group

Reach beyond the "norm" in order to see and achieve what is possible...

The Gust Blog

Truth and Technology Trumps Legalese and Bureaucracy

Truth and Technology Trumps Legalese and Bureaucracy

Startup

Truth and Technology Trumps Legalese and Bureaucracy

The EmpLAWyerologist Firm

The Employer's Legal Wellness Professional

Law Firm Transitions Blog

Truth and Technology Trumps Legalese and Bureaucracy

Blogs from Andrew Romans

Truth and Technology Trumps Legalese and Bureaucracy

HighContrast

Simeon Simeonov on entrepreneurship, innovation & venture capital