IP rights are the latest targets for scammers and low ball schemes.

Have you received an unsolicited email or letter requesting payment in relation to your intellectual property rights? If so, it may be a scam. New Zealand businesses are increasingly being targeted by IP related schemes specifically designed to get them to needlessly part with their cash.

Unsolicited trade mark renewal reminders

You may have received an official looking "reminder" letter from a company that your trade mark registration is about to expire. If this is not from your usual trade mark lawyer or the Intellectual Property Office of New Zealand (IPONZ), you may end up paying heavily for your trade mark renewal.

For example, we are aware that Patent & Trademark Organisation LLC (a US entity which includes an Auckland address on its letterhead) sends unsolicited letters offering to renew New Zealand trade mark registrations at a significantly increased cost. In addition, Patent & Trademark Organisation LLC does not provide you with any additional services provided by trade mark lawyers and agents, such as acting as address for service and keeping readily accessible database records of your trade mark portfolio. Those falling for such "offers" end up paying more and having to pay again for their usual agents' services.

Businesses such as this who have traditionally focussed on luring unsuspecting businesses in Europe and the US have now become increasingly active in New Zealand. Like share "low ball" offers, they are not illegal, so trade mark owners need to be vigilant - in short, be suspicious of any IP related correspondence not from your usual trade mark lawyer or agent.

Inclusion on database of trade marks or patents

One step further are the database scams. Designed to appear like an invoice for registration of an overseas or "international" trade mark, the scam in these letters can be tricky to spot.

Scammers obtain your details by searching online trade mark registers for recently published trade mark applications. They then contact you directly requesting a "filing fee" for registration of your trade mark. In fact, in return for your payment of around US$2,500, details of your trade mark registration will simply be published for a period of time in the scammers' online database. The database has no value whatsoever - as details of your registration are freely available from the relevant trade mark registry's online records.

These schemes have been ruled illegal and shut down in the US, but we are now aware of others operating, particularly out of Eastern Europe.

Notification of overseas domain name registrations

Many different entities (primarily based in Asia) have contacted our clients claiming that someone has applied to register domain names which incorporate their brands (eg www.simpsongrierson.cn). Sometimes these entities say they are just checking that you have authorised these registrations, while at other times they offer to register the domain names on your behalf (and at your considerable cost) instead.

If you respond to these entities you may find that they register the relevant domain names themselves and then try to sell them to you at a highly inflated price. Even worse, they could be operating a phishing scam and contacting you as a ploy to obtain your credit card details.

Chinese trade mark squatting

China has a "first to file" trade mark registration system, so the applicant who is first to file a trade mark application is deemed to be the rightful owner of the mark. (Most other countries including New Zealand have a "first to use" system, which means that if you are the first to use a mark you have rights in it and can probably block an application filed by a third party for the mark.)

Unfortunately, China's system has encouraged the practice of trade mark squatting - squatters commonly file hundreds of applications for trade marks they never intend to use. Sometimes squatters will contact you with an offer to sell the trade mark registration, or sometimes you will simply be shocked to find that your brand has already been registered and you need to negotiate its purchase from the registrant.

Most concerning are unsolicited approaches from Chinese lawyers apparently offering to litigate on your behalf to retrieve your rightful trade mark - these lawyers are often in on the scam, having an indirect connection to the squatter in the first place.

What to do?

If you receive unsolicited IP related correspondence:

  • Be aware that, unless it's from your usual IP provider, it could be a scam.
  • Contact us in the first instance so we can assess its relevance.
  • Don't engage with the sender.
  • Never disclose your credit card or other financial details.