Fraudulent Chinese Trademarks - How China Encourages Trademark Fraud

The Chinese government is paying citizens to register trademarks with the USPTO leading to a rise in fraud committed at the USPTO.

 

The Chinese government is paying there citizens as much as $800 to apply for and register trademarks with the United States Patent and Trademark Office (USPTO). Subtracting the standard $225 USPTO filing fee, Chinese citizens can make as must as $575 for registering a trademark with the USPTO.

 

The Chinese government paying its citizens to register trademarks would not be an issue if the payments did not encourage Chinese citizens to apply for trademark registrations in bad faith. Many Chinese trademark applicants commit fraud during the application process to get a trademark registration, and ultimately get paid by the Chinese government.  

 

And honestly, who can blame the individuals taking advantage of a program like this? China’s median income per month is about $1,000. People trying to provide a better life for their family will jump on the chance to make $575 by registering trademarks, whether they are real or not. If they can register just two trademarks a month, some citizens can more than double their montly salary.

 

Rather than blame impoverished individuals for gaming the system, we need to take a hard look at what is the purpose of the Chinese government subsidizing foreign trademark registrations? Is it to simply encourage Chinese brands to register their trademarks in the US? Or is there a more sinister plot to undermine the US trademark system as a whole?

 

That motivations behind the Chinese government are not clear, but the effects are becoming more visible to USPTO Examining Attorneys, trademark attorneys and practitioners, and trademark owners who see their trademarks were fraudulently registered by Chinese individuals and companies.

 

Fraudulent Specimens are on the Rise

 

Since the Chinese foreign trademark registration payouts began around 2014 (dates vary depending on the sources), the USPTO has seen an increase in fraudulent trademark filings coming from China. In particular, Chinese trademark applicants are submitting fraudulent trademark specimens.

 

At a recent Trademark Policy Advisory Counsel (“TPAC”) meeting, the Commissioner of Trademarks stated that:

 

There’s been a dramatic increase on Chinese filings. A lot of seem to be not legitimate. . .
...one of the things that hits our examining attorneys on a daily basis is specimens, because people are sending in fake ones.

 

Below is an example of a digitally altered trademark specimen like the ones mentioned by the Commissioner of Trademarks. On the left is the specimen submitted during the application process, and on the right is an image of the same mirror as seen on Amazon. The photoshop job is not the most impressive.

 

 

To combat the digitally altered trademark specimens, the USPTO initiated the Trademark Specimen Protest Pilot Program. The program allows trademark owners to send an email to
TMSpecimenProtest@uspto.gov during a trademark application
Opposition Period if the trademark owner has evidence the submitted trademark specimens were digitally altered.

 

However, the program does not allow trademark owners seeking to cancel fraudulently registered trademarks based on fraud to be canceled. This forces trademark owners that find trademark registrations registered with fraudulent specimens to file costly cancellations proceedings.

 

How to Combat the Problem

 

The USPTO Trademark Specimen Protest Pilot Program is a step in the right direction. However, there should also be a streamlined process for instances of specimen fraud for registered trademarks that do not include filing expensive trademark cancellations.

 

In addition, Examining Attorneys needs to be on the lookout for fraudulent specimens. Some fraudulent specimens are easy to spot because the photoshop job is so poorly done. For example, the image below on the left was submitted as a specimen, and a quick Google image search for that image revealed the source image below on the right.

 

Have you encountered any fraudulent trademark specimen filings? Contact us today as we are trying to find a solution to stop this practice and cleanup the USPTO trademark registers.

 

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