Common Intellectual Property Scams

Small brand owners and self-proprietors are often the target of intellectual property scams that are intended to elicit quick cash from innocent owners.  For instance, a recent story from Nebraska details how a small coffee shop was targeted by these scammers.

In Nebraska, the scammers sent an official-looking letter to the local coffee shop advising the owners of Muglife Coffee to register their trademark and brand on “international trademark registries” to potentially avoid losing rights to their mark.  The letters asked the coffee shop owner to pay over $2,500 each time to “register” their trademark.

As most experienced intellectual property counsel know, private companies have long been running these types of scams.  Even the United States Patent and Trademark Office has published official warnings on their government websites, warning trademark owners against “registering” with these third-party registries.

Fortunately, in this case, the owners of Muglife wisely consulted an experienced trademark attorney who immediately advised the owners to ignore the letter.  Despite this, however, many brand owners still fall into this trap every year.  These fly-by-night companies often prey on well-intentioned owners who are eager to protect their growing brand.  In an attempt to curb this abuse, the U.S. Patent and Trademark Office maintains a list of well-known scammers on their website to put owners on notice of these unsavory acts.

This practice, however, is not limited only to the United States.  Foreign versions of the scam are rampant, and the World Intellectual Property Organization has also consistently issued warnings, memorandums, and directives about these fraudulent practices.  To date, at least fifteen foreign intellectual property offices have issued official warnings about these schemes.

While trademarks appears to be the weapon of choice for these fraudsters, it is not uncommon for them to dabble in other aspects of intellectual property law.  For instance, “patent trolling” has become increasingly popular in the last two decades and has often made headlines in both the United States and abroad.  The most common form of patent trolling involves unscurupoulous organizations sending out massive amounts of demand letters, asing for quick payment of “damages” lest there be swift consequences for a lack of cooperation.

More recently, domain name scams have also become common.  These scams generally involve asking the domain owner to purchase additional services or domains via a unnecessary third party.  In cooperating, brand onwers often unwittingly may grant a portion of their intellectual property rights to these third parties.

Unfortunately, once a brand owner falls victim to the schemes, there is not much room for recourse.  The U.S. Patent and Trademark Office states that there is no official or legal way to pursue damages or refunds from these unscrupulous third parties because the conduct is not technically illegal as required by the law.  As such, it is the U.S. Patent and Trademark Office highly recommends hiring experienced intellectual property attorneys to help brand owners navigate the complex legalities of registration, maintainence, and protection of intellectual property rights.  A simple and quick consultation can provide owners with significant savings in the long run as well as peace of mind.


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