• Czech IPO president was keynote speaker at Marques Annual Conference
  • Spoke about "very dangerous" prevalence of misleading trademark invoices
  • Urged parties, including EU Commision and IP5 offices, to take more action

The president of the Czech Republic Industrial Property Office, Josef Kratochvil, has issued a strong warning about the “very dangerous” activities of entities sending fraudulent solicitations to trademark applicants. Speaking to World Trademark Review, the respected IP expert urged the EU Commission to include the issue on its list of crimes, and for more joint action by leading IP offices.

In a keynote speech at the Marques Annual Conference, being held in Prague this week, Kratochvil gave a detailed update on the Czech Republic's IP office. Due to the number of applications being filed, he revealed that trademarks “are considered the core of our business nowadays”. That number stood at 8,000 new applications filed in 2016, with an average wait time of four months. In all, there are 1.3 million trademarks registered in the Czech Republic, three-quarters of which are via EU applications.

While laying out positive numbers and developments at the office, he ended with a stark warning about the threat he perceives in misleading correspondences from entities posing as IP offices. As a reminder, these fraudulent solicitation campaigns mostly take the form of a physical letter claiming to be from an official trademark office (eg, “PTO: Patent & Trademark Office”, “WIPO: World Intelligent Property Office”), and are commonly designed to look like an invoice. The letter will often offer to “register” or “record” trademarks, with each claiming a substantial fee is required to be paid. They are sent to names and addresses mined from trademark databases and, shockingly, a recent example of this type of activity revealed that upwards of 8% of misleading invoices lead to payment.

For Kratochvil, the problem of these fraudulent communications has become so severe that he claims it is “very dangerous for the future of trademarks” and could “create a situation where users lose confidence in the entire IP protection system”. The Czech IP office is taking a number of steps in its attempts to tackle the issue – a key one being transparency. “We explain on our website, our forms and on our official communications with applicants that they should expect misleading offers or payment reminders soon after their filing data appears in public databases maintained by our office or the EUIPO,” he explained. “Only when these offers or reminders are examined with more detail is it evident that there is no official authority behind the communications.”

Other actions the Czech office is taking against such entities, Kratochvil added, include filing criminal complaints, publishing misleading invoices on the office’s website, asking banks to close down accounts, and asking property owners to close down offices or destroy post boxes. But ultimately, these solicitation campaigns continue in the Czech Republic – and Kratochvil appeared openly frustrated about the situation while speaking on stage.

Speaking with World Trademark Review later in the day, Kratochvil revealed his exasperation at a perceived lack of action against misleading invoices. “Mankind is ready; it acts to protect ‘ordinary consumers’ and ‘normal’ people, be it those who are old or young – everyone it seems, except entrepreneurs. Are entrepreneurs extraordinary or abnormal people that are not worth protecting? Do we take into account that those who work for companies are ‘ordinary, normal’ people who are sometimes students or pensioners that are proceeding with these misleading invoices/offers? Isn’t it high time we protect them like those other people labelled as ‘consumers’?”

Asked what specific actions he thinks needs to be taken, Kratochvil had a number of suggestions. The first is more joint action directed at banks and financial institutions, such as letters from WIPO, the EUIPO or all of the IP5 offices, to explain that they are “directly supporting unfair competition”. The second is for the EU to take the issue seriously. “The EU Commission need to be asked to look at this problem as a priority, with the aim at putting such an activity on its list of crimes; because this issue is not bloody easy, but the only way to stop it in full may be arresting some of them involved, which might be seen as ‘best practice’ to others and act as a warning to stop…”

Of course, other IP offices are taking trademark solicitation campaigns increasingly seriously. For example, the USPTO hosted a roundtable event about the issue in May, and pledged to take a more “international approach” to tackle misleading invoices in the future. Kratochvil admitted he has not contacted the USPTO yet, but pledged to do so and agreed that “such a battle needs to see joint efforts worldwide”. It appears, then, that momentum is building to take on the problem of fraudulent trademark solicitation campaigns – time will tell whether it leads to more effective measures to stop it.