Fraudulent Filings at USPTO Increase Wait Times for Legitimate Filers

Much like how the orange construction barrels on the highway can reduce the travel lanes and create a long wait for drivers, the United States Patent and Trademark Office (USPTO) has been slowed down by a dramatic increase in fraudulent trademark filings over the past six years.

Fraudulent applications have caused legitimate applicants to wait approximately double the usual time to have their applications approved by the USPTO, and that approval comes only if a fraudulent application hasn’t secured the desired trademark first. In that case, it is incumbent on the legitimate filer to do the audits and gather the evidence to bring legal action against the fraudulent filer, which takes more time and money.  

Almost all of these fraudulent filings can be tracked to Russia, China, Pakistan and other foreign countries, where fraudsters file the registration using a small business’ name, but then use fraudulent information in the rest of the application, essentially stealing the identity and trademark of the small business.  In some cases, applicants have downloaded photos of products stolen from legitimate websites with the photos doctored to substitute the fraudulent brand name for the legitimate name.  

How big is this problem? Consider that in 2014 there were only 6,323 trademark applications filed, but that has grown exponentially over seven years to reach more than 175,000 applications filed last year. Since 2019, there has been a 262 percent increase in filings, with a 385 percent increase in filers from China from 2020 to 2021. Overall, Chinese applications for a U.S. trademark have grown by 2,700 percent since 2014.

Most of these applications are bogus and may even be incentivized by a foreign government. Some reports indicate that Chinese filers receive incentive payments and/or other types of favorable treatment from Chinese government officials if they can secure a U.S. trademark. 

To combat the growing problem of clutter in the registry, the USPTO has introduced the Trademark Modernization Act (TMA), which was passed by Congress in December 2020 as part of year-end COVID legislation. Last year, the USPTO began implementing rules to deal with this fraud.  This year, on August 6, the USPTO began requiring all trademark filers to verify their identities when filing electronic trademark forms.  This initiative, which has been in place on a voluntary basis since January 2022, includes options for both paper and electronic identity verification.

As part of this new protocol, applicants who file electronically can match an uploaded selfie with a valid government-issued ID card or undertake a brief video interview with a USPTO representative.  Both the selfie and the video will be deleted after a specified time period (24 hours for the selfie and 30 days for the video) to reduce the risk of a hacker gaining access to legitimate identification information. The USPTO still accepts paper applications, and anyone who already has a verified ID can use their existing accounts for future filings.

These much-needed steps by the USPTO to battle fraud have the effect of creating a burden on legitimate trademark applicants.  For one thing, it increases the time that it takes for legitimate filers to get a registration filed and approved. Plus, in the event of a legitimate registration being blocked by a fraudulent filing, it takes additional time and money for the legitimate filer to lay the groundwork for gathering evidence to get rid of the bogus applications and registrations.

Obviously, times are changing at the trademark office, and even if a small business owner has filed a trademark application by themselves in the past, the rules have changed. Most small business owners have neither the time nor money to combat such fraud, so it may be smart to consult an intellectual property (IP) attorney who is knowledgeable in filing trademark agreements and can prepare the application in such a way to minimize any delays in the application process.

Stanley Ference is the Managing Partner at Ference & Associates, an Intellectual Property firm with experience in patents, trademarks, copyrights and online brand protection and counterfeiting. Visit www.ferencelaw.com or call (412) 741-8400.