USPTO Targets Removal of 10,500 Trademarks for Fraudulent Submissions, Scam Billing Practices

Yesterday, the U.S. Patent and Trademark Office published a trademark alert highlighting actions that the agency has taken recently to remove fraudulent and otherwise invalid marks from the federal trademark register. In 11 administrative orders issued by the USPTO since the beginning of last October, the agency has either invalidated or is targeting for invalidation around 10,500 trademark applications and registrations for reasons including forged attorney signatures and inventing non-existent trademark registration requirements and fees.

Administrative Orders Part of Concerted Effort to Address Rise in Fraudulent Marks

Trademark filings at the USPTO reached all-time highs in the early 2020s, due in large part to an influx of filings from China. The agency stepped up its efforts against fraudulent trademark filings around the same time, establishing identity verification and authentication procedures for logging into USPTO platforms online. Although the overall number of trademark filings at the USPTO have risen rapidly in recent years, making fraudulent filings more prevalent, concerns about trademark application scam artists who purport to have either authority for filing trademark applications or additional services that trademark owners don’t actually need have stretched back for many years and have been reiterated by the Federal Trade Commission (FTC) as recently as last September.

While the tenure of current USPTO Director John Squires has been notable for Squires’ impact on patent validity proceedings at the Patent Trial and Appeal Board (PTAB), the agency has been making large strides in invalidating fraudulent trademarks during the same period of time. Two months before Squires was officially confirmed, the USPTO announced that it had entered sanctions against a foreign filing firm that had submitted filings without the proper authority or qualifications, leading the agency to cancel more than 52,000 fraudulently submitted trademark applications and registrations connected to that firm, which had engaged in the misuse of credentials from cooperating U.S. attorneys, submission of fake specimens of use and repeated signing of documents using other people’s names.

Similar issues involving the unauthorized practice of law and falsified information on trademark applications led to several of the administrative orders entered by the USPTO since last October. In a show cause order entered against Shenzhen Huanyee IP on January 27, the USPTO highlighted several violations of agency rules and USPTO.gov terms of use including improper entry of signatures by individuals who, when pressed about their role in those trademark applications, declared under penalty of perjury that they were not involved in their filing. Further, the trademark filing company violated online terms of use by maintaining accounts through which numerous individuals filed trademark applications, not just the named account owner. One USPTO.gov account associated with Shenzhen Huanyee IP filed more than 4,900 trademark applications in a 14-month period between March 2020 to May 2021, often engaging in rapid filing with intervals of three minutes or less between many submissions.

Double Billing Practices, Signatory Rule Violations Lead to Orders to Show Cause

Another show cause order entered on February 25 targeted trademark applications filed by Swift Brand Mark LLC, which had submitted more than 1,600 trademark applications in the names of thousands of geographically diverse trademark owners. These applications were filed via the direct signature method, which requires the signatory to enter the signature, but the submissions originated from a small, geographically isolated computer network and even a handwritten signature was found to be entered by the respondents instead of the signatory. As well, no names attached to the USPTO.gov accounts used to file these applications appear to qualify as attorneys or support staff working under attorney supervision as required by agency rules.

On March 26, a show cause order entered by the USPTO proposed to reconsider registration decisions related to trademark applications submitted by Deputy Trademark, which is connected to 16 different USPTO.gov accounts that appear to be relatedly controlled by a single email address. In an attached exhibit showing correspondence between trademark owners and Deputy Trademark, evidence shows that the trademark filing company engaged in double billing practices as well as charging for additional services that were unnecessary for the applicant including declarations for renewing trademark registrations and continued proof of trademark use. Similar to Swift Brand Mark, Deputy Trademark filed more than 3,000 trademark applications for geographically diverse applicants through a small, isolated computer network while improperly using the direct signature method.

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