Bad actors are constantly looking to trick unsuspecting startups into unnecessarily giving up their already-limited resources. One scam gaining in popularity is to impersonate government officials and ask startups for payment to “renew” their existing trademarks, and it demonstrates how intellectual property systems can be weaponized against startups.
Startups and small businesses are, unfortunately, no strangers to abuse under the auspices of our intellectual property system. They get demand letters from patent assertion entities, threatening frivolous patent suits and trying to coerce payments for low-quality patents. And, especially for startups that host user-generated content, they receive wrongful takedown notices from purported rightsholders who are just leveraging IP complaints to remove lawful content from the Internet.
Startups and small businesses also face misleading or fraudulent notices related to their trademarks. These notices can look like they came from an authority like the U.S. Patent and Trademark Office (USPTO). And they attempt to get startups to pay fees they do not owe or purchase services they do not need. Trademarks are something virtually every business needs—so any startup that has registered their marks with USPTO could be a target for these scams.
In one example, a company calling itself the “Patent & Trademark Office” is sending letters to small businesses, claiming that their trademark is about to be canceled. The letter asks the target to pay a renewal fee to this private company—indicating that the target’s trademarks will be canceled otherwise. As the actual USPTO has noted, though, these scams are asking small businesses “to pay fees and for services that are not needed or required,” “to pay inflated fees,” or essentially purchase services from non-attorneys that are not authorized to perform those services.
As one startup CEO, Peter Harter of Markup, has described it:
“It is outrageous that a scammer is making money by calling itself the ‘Patent & Trademark Office,’ mailing official looking notices declaring your trademark is under ‘pending trademark cancellation,’ and even providing you a prepaid return envelope addressed to the ‘PTO’ where the scammer gets your money. Fortunately, my startup has sophisticated IP counsel, so we did not fall for this scam, but I fear many other startups are probably being duped.”
What can startups do?
Startups need to be on the lookout for these scams. Just like you recognize and avoid phishing online, these scams reveal the value of looking at IP-related notices carefully and deciding how to respond.
Check USPTO resources about trademark scams. The agency (again, the real U.S. Patent and Trademark Office) has a website summarizing the scams, and it has shared several samples of misleading or scam notices.
Reach out to USPTO. If you think you received a misleading notice, but you aren’t sure, you can contact the agency at 1-800-786-9199—to try and understand if the correspondence is a scam or if it is legitimate. There are legitimate trademark renewal requirements, fees, and other legal services—but as the agency has made clear: “official correspondence about [] trademark application[s] or registration[s] will be from the “United States Patent and Trademark Office” in Alexandria, Virginia, and all emails will be from the domain “@uspto.gov.”
Report the scam. If you did receive a scam notice, you can send a copy to USPTO (TMScams@uspto.gov) and file a complaint with the Federal Trade Commission.
What can policymakers do to help?
Convene a hearing to understand the problem and identify concrete solutions. Congress should convene a hearing where it can learn about these scams, hear from affected businesses, and understand how the government is responding. This would raise the profile of the issue and allow policymakers to craft new solutions to protect startups and small businesses.
Investigate and deter scams. Scammers can, and have, been convicted or pled guilty in the past.
Educate startups about the risk. USPTO should flag these scams in its education and outreach programs, and coordinate with other agencies that interface with small businesses to help spread information about the risk. It should also ensure information about trademark scams is easy to find.
Continue collecting and sharing examples of scam letters. USPTO’s current collection of sample scam notices is a valuable resource. The agency needs to keep that information current, so it can keep up-to-date as the scams evolve.
Disclaimer: This post provides general information related to the law. It does not, and is not intended to, provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.
