Trademark owners, beware: protecting your brand in the era of trademark scams | Smart & Biggar
An important component of brand ownership is exercising vigilance against fraudulent practices, such as counterfeiting and trademark pirating. Trademark owners must now also be alert to fraudulent communications from seemingly legitimate trademark practitioners.
Trademark owners are increasingly the target of fraudulent email correspondence threatening imminent legal action or the loss of trademark rights if they don’t quickly respond. This correspondence intends to capitalize on trademark owners’ desire to protect their brands.
This article aims to help trademark owners identify these scams and protect their brands.
Common features of the scams
1. Failure to identify the true source of the correspondence
A scam email often begins by claiming that the sender represents a client attempting to secure rights that would conflict with those of the trademark owner. However, the alleged client is not identified. The fraudster also may try to elicit a response by neglecting to specify the trademark at risk.
Alternatively, the fraudster may claim to represent a competitor that wants to register a trademark that the trademark owner is using. The fraudster will then offer to register the trademark for the owner.
For example, a recent email stated:
“This is our final attempt to reach out to you regarding the registration of the brand name [redacted]. If we do not receive your confirmation for registration today, we will proceed with the other applicant by tomorrow, potentially leading to the loss of your right to use the brand name [redacted]
…
As part of our rigorous trademark registration process, we conduct thorough checks on Google and social media platforms to ensure the uniqueness of the brand name. If we don’t receive confirmation from the current user (within 48 to 72 business hours), we move forward with the party interested in registering the name. ”
Lastly, the fraudster may claim to represent a competitor whose rights the trademark owner is allegedly violating, without specifying who the competitor is, or what trademark rights are violated.
The above examples raise two red flags that trademark owners should recognize. First, a proper cease and desist letter will identify on whose behalf it was written and what trademark rights were violated. Second, legitimate trademark practitioners will not jeopardize the rights of a client by notifying a third-party trademark owner of the client’s prospective trademark filing.
2. Extreme time pressure and punishment
These scams consistently demand that trademark owners respond in a very short period of time or else face a substantial penalty. In recent examples, the fraudster demanded a response in two or three business days or else the trademark owner could face civil or criminal sanctions.
Extreme time pressure is a common feature because fraudsters hope to create a sense of urgency to force a trademark owner to act quickly and without professional advice.
3. Using the identity of a legitimate practitioner
Many of these scams appear to originate from legitimate trademark lawyers. Spoofing the name of a known trademark lawyer within the e-signature is a tactic employed to legitimize the correspondence. However, some quick Googling can expose this practice.
For example, an email may appear to be sent by John Smith at ABC Trademarks Law Firm. A quick Google search will demonstrate that John Smith practises at a different firm, and that ABC Trademarks Law Firm has a website that does not list any practitioners. This should raise significant red flags and indicate that the letter is fraudulent.
4. Poor writing
The fraudulent cease-and-desist letters will often be riddled with poor grammar and simple factual mistakes, such as alleging that a registered trademark owner has no trademark registration.
For example, a recent email stated:
“This is email hereby is in regards to the conflict we have received for trademark being filed for the similar mark.
[…]
We would suggest you to draw out your application as it is not gotten the registration number and the certificate and we are going ahead and filing National and International Trademark Application for the mark [redacted] under our client’s ownership.”
5. Inaccurate understanding of the law
Finally, these letters often incorporate legal mistakes, such as a threat to sue in the wrong jurisdiction or to inflict impossible consequences.
These scams count on the trademark owner’s lack of familiarity with the details of trademark law. This is particularly dangerous for trademark owners dealing with their rights in foreign jurisdictions. These errors are immediately apparent to trademark practitioners, so it is vitally important to bring these letters to the attention of your trademark counsel.
How trademark owners can protect themselves
First, trademark owners must refrain from acting on impulse. These scams aim to create a sense of urgency to force owners to act quickly and disregard the myriad of red flags present. For businesses, it is vitally important that all employees can recognize potential scams and refrain from sending immediate responses.
Second, when in doubt, a trademark owner should contact their legal counsel, who can recognize legitimate letters and will have a record of the trademark owner’s registrations. The owner’s legal counsel can then respond directly if necessary.
Lastly, a trademark owner should understand that a trademark registration can act as a shield rather than a sword. Under Canadian practice, a trademark registration permits its owner to use the trademark across Canada unless the registration is invalidated in court. Trademark owners should ensure that their trademarks are registered in all jurisdictions of interest.
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