Number of fraudulent trade mark registers on the rise

Brand owners have seen a 50 per cent increase in the number of misleading demands for money, according to official Intellectual Property Office (IPO) figures.

There have been 312 instances per quarter of unauthorised organisations offering companies a place on their own 'trade mark register', unconnected to official registers of intellectual property, since the beginning of the year. This represents an increase of 45 per cent compared to 2013, which had an average of 215 cases per quarter.

At an average cost of approximately £1,000 per unofficial demand for payment, this practice has the potential to cost smaller businesses £1.25m per year on unnecessary fees.

Chris McLeod, president of the Institute of Trade Mark Attorneys (ITMA) and director of trade marks at Squire Sanders, said that intellectual property was a vital ingredient in every business model.

"Small companies and big brands alike know that protecting their trade mark or design rights can be one of the best investments they ever make," he explained, "Yet many organisations, particularly smaller businesses, lack the resources to distinguish truth from fiction when they receive letters or emails asking for payment. Those operating misleading 'registers' tend to offer unsuspecting businesses the prospect, at a considerable cost, of featuring on their own unofficial lists of trade marks or designs. However, these lists often aren't even publicly available - and they certainly provide no legal protection for trade marks or designs."

McLeod continued: "Eradicating this confusion will rely on greater awareness - by contrast to simpler situations where fraud and passing off are more blatant. The Intellectual Property Office has recently made great progress clamping down on the most clearly fraudulent misleading messages. Yet unethical groups are still finding more subtle ways to seed confusion - and profit from ignorance."

Misleading 'reminders'

Progress has been made against other types of misleading organisations. This trend is clear in the wake of rulings made by the Advertising Standards Authority against companies attempting to pass themselves off as the verified IPO.

In 2013, there were on average of 73 cases per quarter of misleading 'reminder' letters about upcoming renewals of trade marks. These reminders usually contain a demand for payment at a considerable premium to the actual fees charged by the IPO.

However, this problem has abated since the first three quarters of 2014, which saw the number of misleading renewal reminder letters drop to an average of 52 cases per quarter, a 29 per cent improvement over 12 months.

"Taking action against those who appear to be committing fraud is relatively simple - as demonstrated by this decisive and successful action by the IPO," said McLeod. "Where the evidence is clear, the required course of action is also clear, and this is a developing success story.

"However, it is much harder to eradicate what are arguably worthless proposals which come without any qualified advice. Unofficial trade mark registers are essentially an issue of a costly lack of awareness about official routes to registration and maintenance of trade marks.

McLeod added: "Experienced, qualified, and registered professionals can review these notifications at a glance, to enable businesses to focus on the real legal protection that maintains hard-won brands and reputations. Registered trade mark attorneys routinely filter out misleading correspondence of this nature. Indeed, our members regularly advise their clients to ignore unsolicited mail such as these 'reminders' and invitations to join such 'registers' - which usually have little connection to genuine trade mark protection."

John van der Luit-Drummond is legal reporter for Solicitors Journal