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US court cracks down on trade mark registry scammers

A New York court has handed down a first-of-its-kind judgment against a company which charged trade mark owners nearly $1,000 for inclusion in a so-called catalogue of registered US trade marks

The complaint, which was filed by Leason Ellis, alleged that the business, USA Trademark Enterprises, and its principals, Timea Csikos and Andras Nemeth, engaged in false advertising and unfair competition. It claimed the company sent unsolicited notices designed to look like official government correspondence, and that the catalogue offered no commercial value because the information it published is freely available in the USPTO’s online records.

USA Trademark Enterprises denied any wrongdoing or liability, but the mutual consent judgment, which was entered on June 14 by the United States District Court for the Southern District of New York, banned it from publishing the catalogue again or engaging in IP-related activities in the US. It also required the Florida company to pay $10,000 to the firm.

Leason Ellis partner Martin Schwimmer described the scheme as part of “a chronic problem” which has become more prevalent in the US since the USPTO’s trade mark database became available online. The firm, which owns the trade mark Leason Ellis, filed the suit in January after receiving an unsolicited notice from USA Trademark Enterprises.

“I have seen this the entire time I have been a practising trade mark lawyer,” said Schwimmer. “It’s disturbing to see unsophisticated trade mark owners targeted by these individuals, so we contributed our part in putting one operation out of business. We would like to turn the tide.”

In a recent interview, USPTO commissioner for trademarks Deborah Cohn told Managing IP the Office has been monitoring the uptick in fake solicitations and sent a cease and desist letter to at least one company.

Schwimmer described USA Trademark’s targets as, “broadly speaking, not represented by sophisticated trade mark counsel. These would be smaller businesses – people who really can’t afford to pay out $1,000 for no return. There were a lot of non-profits”.

Leason Ellis plans to donate the $10,000 granted by the judgment to the USPTO to help fund programmes alerting trade mark owners to the issue. USPTO spokesman Patrick Ross confirmed that the organisation has received legal clearance to accept the donation.

He added that the USPTO is engaged in “ongoing education efforts on this critical problem”, including media campaigns, talking to business groups, and including a printed warning notice with every trade mark registration certificate that is sent out.

The former website of US Trademark Enterprises now appears to have been taken down, and emails to the company were returned as undeliverable. Its attorney, Andrew Cove of Florida firm Cove & Associates, did not immediately respond to a request for a comment.

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