Over the last few months, the United States Patent and Trademark Office has been quietly discussing changes to the trademark process for foreign applicants. Specifically, the USPTO may soon implement a rule requiring foreign trademark applicants to hire US-based lawyers to handle the trademarking process. This is in response to a massive spike in foreign applications—the patent office has seen an eleven-fold increase in Chinese applications.
One of the chief motivating factors for this requirement is an influx of fraudulent trademark filings. These can take several forms. For example, a company submits a trademark for a retail product. A copycat soon after submits their own trademark application for the same name. The first company botches their application in a manner that requires refiling, allowing the copycat to effectively usurp a trademark they didn’t actually create.
However, this isn’t the only problem that the USPTO is trying to stem with the rule change.
Rights thieves have been inundating the USPTO with false power of attorney filings, taking control of trademarks, and then attacking legitimate product sellers online.
Not too long ago, I received an email indicating that a contact email address had been updated for a trademark application I had filed on behalf of a client. I immediately contacted the USPTO to report this fraud. I received a call back from an employee at the Patent Office, who explained to me that there has been an ongoing epidemic of trademark thievery. The aforementioned rule change had been proposed as a means of solving this problem.
Here’s how this scam works. First of all, anyone can take power of attorney in a trademark application at the USPTO, even without the consent of the trademark owner. It’s quite easy to submit fraudulent paperwork indicating that you have been designated by the trademark filer to act on their behalf. When the thief takes power of attorney, the contact email address for the trademark is updated. All the emails related to that trademark are then sent to the thief, and the legitimate rightsholder never realizes that anything is wrong.
Then, using this same email address, the thief registers the trademark with Amazon’s Brand Registry program. Amazon would believe that the thief is the owner of the trademark, because the contact email submitted to Amazon would match the email address in the USPTO’s trademark database.
Once the thief has successfully registered the trademarked brand with Amazon, they gain access to reporting tools. This allow them to submit takedown notices against anyone on Amazon selling those products by falsely claiming that the products are counterfeit. Because the complaints are coming from what appears to be the rightsholder, Amazon has no reason the question these claims, and takes the listings down. This clears the playing field for the thief, who can then sell those (often counterfeit) branded products on Amazon with no outside competition.
This isn’t just a matter of a few individuals gaming the system. Increasingly often, unscrupulous Amazon sellers will turn to established rights-stealing firms, typically located in the Philippines or Malaysia, to steal targeted trademarks and then remove competitors or even get their accounts blocked.
This is not an emerging issue, nor is it a conspiracy theory. Amazon sellers have long been the targets of false infringement claims. According to the USPTO, unscrupulous foreign-based counterfeiters are now finding ways to take control of established trademarks, flying under the radar of legitimate rightsholders.
By requiring American legal representation for trademark applications and filings originating from outside the US, it will significantly increase the financial burden on would be rights thieves and make it easier to catch and stop false filings.
In the meantime, rightsholders should carefully monitor their trademarks and periodically check to make sure that their contact information is correct. If there are any discrepancies, contact the USPTO immediately to head off any potential trademark hijacking.