Intellectual Property Scams

 

 

Be alert – Intellectual Property scams are on the rise! This article describes Intellectual Property (IP) scams, such as trademark scams, presents examples, and outlines protective steps to counter them. Scammers use fake trademark or patent notices, threatening language, and illegitimate demands for fee payment to trick owners into paying unnecessary fees or providing sensitive, private information. The Canadian Intellectual Property Office (CIPO), the Better Business Bureau (BBB), and the College of Patent Agents and Trademark Agents (CPATA) have issued warnings about these scams. Moreover, the frequency and degree of sophistication of these scams have increased.

The Nature of Scams

Trademark or patent scams may include unsolicited emails or letters warning of an urgent or time-sensitive issue involving their trademarks or patents. For this article, the focus will be placed on fake trademark notices, but it is equally applicable to fake patent notices.

For instance, these unsolicited notices indicate that a third party attempts to register the same trademark or business name and suggests immediate fee payment to prevent possible trademark infringement or loss of rights. Scammers may use alarming language to immediately motivate the trademark owner to submit a fee hurriedly under false pretenses.

However, by submitting such fees, the uninformed trademark owner mistakenly believes they have avoided potential loss of control over their trademark. Common characteristics of these scams may include:

1. false claims of possible trademark infringement or unauthorized registration by a third party;
2. usage of urgent language to apply pressure on the trademark owner to act quickly or risk severe consequences for failure to pay the requested fee;
3. requests for payment of fees or sensitive information, such as financial or personal details, to immediately protect the trademark from adverse risk; and
4. usage of fake identification of intellectual property (IP) attorneys, agents, or IP protection companies, sometimes using convincing names such as “Trademark Protectors” or “Trademark Guardians.”

Scam Patterns

Trademark scams may vary in approach but share similar characteristics. Some patterns include the following:

• the scare tactic: scammers send alarming emails claiming that a third party has applied for the same trademark with CIPO. These emails often claim that without immediate payment, the recipient may lose their trademark rights or incur significant financial losses.

An example of such an email might include:

“This communication serves as a final notice regarding a critical issue concerning your business name ‘XXXXX.’ Immediate action is crucial to protect your intellectual property rights. Please contact us immediately to discuss the next steps.”

By suggesting severe legal consequences due to inaction, scammers induce panic so that recipients quickly respond by paying fees to defend their trademark.

• fraudulent notice: scammers may send fake renewal notices claiming that a trademark or patent is about to expire. These notices appear official and often resemble correspondence from CIPO or legitimate IP offices.
  They may ask for renewal fees, which, if paid, are lost to the scammer. The BBB has reported numerous complaints from business owners who fell victim to fake renewal emails that demanded payment for non-existent trademark renewals.
• impersonation of legitimate agents or firms: scammers sometimes impersonate real agents or firms using credible names such as “Trademark Masters” or “Trademarks Hub.”
  They may also fraudulently use the name of a licensed agent, further deceiving recipients into believing the illegitimate communication is authentic. According to CPATA, common fake agent names used in these scams include “Kevin Parker,” “John Parker,” or “David Smith.” These fake messages might even include personal details about the recipient’s business, making the communication appear more legitimate.
• threat of legal action: scam emails cite potential legal consequences, such as injunctions or cease-and-desist orders, if the recipient fails to respond promptly. This tactic is designed to intimidate recipients into acting without seeking verification.

An example scam email might state:

“Failure to protect your trademark could lead to severe consequences, including potential litigation costs ranging from $120,000 to $750,000, depending on the case’s complexity.”

By inflating the potential legal ramifications, scammers make their request for an immediate response appear more urgent and pressing.

Identifying a Scam

Trademark scams can be challenging to detect since they may use compelling language, names, and threats. The following are warning signs that can help identify a possible scam notice:

1. an unknown source: be cautious when a notice comes from an unfamiliar sender. Check the email address for legitimacy; genuine IP offices and agents typically use official domain names.
2. usage of urgent language: a scam notice often emphasizes urgency, such as “immediate action required” or “final notice.”
3. an unsolicited request for payment: be wary of a notice asking for immediate payment for trademark registration, renewal, or protection. Reputable IP offices, including CIPO, will not solicit payments through random emails.
4. usage of threatening legal language: if the notice includes threats of legal action, litigation costs, or other financial repercussions, it may be an attempt to intimidate you into acting quickly.
5. a lack of listed license or registration: verify the identity of any agent or attorney mentioned in the notice. You can use CPATA’s Public Register to confirm if a name appears as a licensed trademark agent.

Examples

The following are excerpts from scam notices:

Example 1:

I am writing to urgently address a potential trademark infringement issue concerning your trademark, “JANE DOE.” We have received a request from another party to file a trademark registration application for the same trademark with CIPO despite your long-standing use of it. Trademark infringement is a serious issue requiring immediate action to safeguard your rights. Your prompt attention to this matter is vital. Let’s work together to secure the full ownership rights of your intellectual property.

Example 2:

Dear X, this communication serves as a final notice regarding a critical issue concerning your trademark. An applicant has initiated the process for trademark registration of the same trademark. Time is of the essence as more than 24 hours have passed since their application. Immediate action is crucial to protect your intellectual property rights and prevent further unauthorized trademark use. Please contact me at 555-555-5555 to discuss the next steps.

Protection Against Scams

To avoid becoming a victim, use the following proactive steps:

1. be skeptical of unsolicited notices or emails. If you receive a request for payment for your trademark, investigate further and avoid immediately submitting the requested payment. Instead, evaluate its content for the usage of urgent language or threats.
2. verify the sender’s identity by checking the sender’s email address, domain, and signature. Scammers often use generic email services, while legitimate IP agents and offices typically use official addresses. Cross-reference the sender’s name with CPATA’s Public Register to verify if the sender is registered.
3. check the CIPO website for scam alerts. CIPO frequently updates its website with the latest information about ongoing scams. If you receive a suspicious email, consult CIPO’s scam alert page to see if the email resembles a known scam.
4. if you receive a notice directly requesting fees, consult MacRae & Co. and we will determine if the email is legitimate and provide advice on next steps.
5. never share personal, business, or financial information by withholding this sensitive information from unsolicited contacts. Genuine patent offices will not request your financial information through email.
6. report suspicious communications to the appropriate authorities. To help raise awareness of a scam, you can contact CIPO, the BBB, or even local consumer protection agencies.
7. review your application status regularly on the CIPO website. By checking the official website regularly, you’ll know if you owe any fees or have any pending deadlines.

CIPO, BBB, and CPATA

The role of CIPO, the BBB, and CPATA is to provide education against intellectual property scams. CIPO regularly updates its website with alerts and guidance for IP owners, including examples of scam emails. You can report scams with BBB. The following links provide further information from each of these sources:
CPATA: https://cpata-cabamc.ca/en/scam-alert-fraudulent-notices-related-to-patents-and-trademarks/
CIPO: https://ised-isde.canada.ca/site/canadian-intellectual-property-office/en/scam-alert-beware-phishing-emails-targeting-trademark-owners
https://ised-isde.canada.ca/site/canadian-intellectual-property-office/en/warning-scam-notices-related-patents-or-trademarks
BBB: https://www.bbb.org/article/news-releases/30258-bbb-business-scam-alert-fake-patent-and-trademark-renewal-emails-are-targeting-business-owners

Stay Alert

Patent or trademark scams can result in financial loss, unauthorized access to sensitive information, and compromised intellectual property rights if acted upon. Recognizing the warning signs and refraining from sending payment can help protect a trademark.

While CIPO, BBB, and CPATA provide guidance, trademark and patent holders must verify any suspicious communication they receive before submitting a payment. The increasing sophistication of scams means trademark and patent owners must proactively protect their intellectual property rights and assets. When in doubt, remain cautious, confirm identities, and consult MacRae & Co. to significantly reduce risk from such fraudulent schemes.