05 May 2011

IP Owners Beware! Australian Renewal Scam Alert

We have recently become aware of a 'renewal scam' being operated by a company calling itself Patent & Trademark Organisation which is apparently operating an office in Melbourne, Australia, although it seems in fact to be a limited liability company (LLC) registered in the US.

So far, we have only seen evidence of the scam being applied to trade mark renewals, but the company name suggests that it may aspire to 'assist' applicants with obtaining and/or maintaining other registered rights.

The scam appears to work as follows:

  1. the company identifies trade marks on the Australian Register that are coming due for renewal;
  2. it then sends a letter to the trade mark owner advising that the trade mark is about to expire, and offering to attend to renewal for a fee of A$1350.00 for one class, and a further A$650.00 for each additional class;
  3. if the trade mark owner signs and returns the letter, the company pays the renewal fees and sends out an invoice.
The Official Fee payable to the Trade Marks Office for renewal of a registration is A$300.00 per class.  This means that the Patent & Trademark Organisation is pocketing A$1050.00 for the first class, and A$350.00 for each additional class.  These charges are nearly twice those of many full-service patent and trade marks attorney firms, which also maintain records of the registration details, and act as the address for legal service on behalf of the trade mark owner throughout the ten-year period between renewals.  Specialist renewal service providers, which do not provide any additional attorney services, are generally even cheaper.

This is, therefore, an out-and-out scam, designed to dupe trade mark owners into paying excessive service fees in exchange for little, or no, additional service.  But is it actually illegal?


We understand that the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) is aware of this operation, however (aside from being a nuisance and trading without a registered business name) the Patent & Trademark Organisation does not appear to be doing anything illegal.

We have captured an example of one of their letters, which you can download here.  The small print clearly indicates (if you read it carefully) that this is a reminder and an offer to provide a 'service', and not an invoice requiring payment.  The organisation does not purport to have any official status, and the letter expressly mentions that the recipient is also free to contact its representative to assist with renewal.  Australian telephone and fax contact numbers are provided, as well as an email address.


We encourage all of our readers to remain on the lookout for these types of operations, and to spread the word in order to raise awareness.  As we have written previously (here, here and here), scams of this type are becoming increasingly prevalent on a global basis and, since they are often perfectly legal, the only way to discourage their further spread is to starve them of funds. 

There is no shortage of organisations offering legitimate monitoring and renewal services, with a range of different pricing structures commensurate with the level of service provided.  There is no justification for any IP owner to pay top dollar for bargain basement service!


Abc said...

If the LLC is registered in the USA, why do its Terms and Conditions say "11. Governing law: This Agreement shall be construed in accordance with and be governed by the laws of Latvia."?
Very fishy.

Patentology (Mark Summerfield) said...

Interesting - I hadn't spotted that!

It does not necessarily mean that the company has any actual Latvian connections.  Parties to an agreement can elect any governing law they wish (of course, this is a somewhat unilateral agreement).

While an Australian court would no doubt have jurisdiction over a dispute in which one of the parties is resident in Australia, it might be reluctant to decide the matter under the law of an 'obscure' jurisdiction like Latvia.

In short, whether or not the company has a Latvian presence, it is likely to be very difficult and costly for an Australian entity to get any relief from a court.  Which is no doubt the intention.



P Mitchell said...

In the form I  rec'd from this company, the charge would have been $1485 plus $650 per class of which they said I had 25 when I had only one class.
Sure does pay to read the fine print!

Patentology (Mark Summerfield) said...

Are your goods clothing, headgear and/or footware?  These are all goods in 'class 25' of the international trade mark classification system, so you may have misread the notice.

Which does not alter the fact that you would have paid them $2135, of which the actual renewal fee is only $300!  Yes, it does pay to read the fine print.


pegacat said...

They are indeed branching out into patents... I received a patent renewal 'fee' (for a patent which had in fact just been renewed...)

Patentology (Mark Summerfield) said...

Thanks for letting us know. This is a disappointing, if unsurprising, development.

I would be interested to see the correspondence. If you've kept it, and are happy to share, I can be reached at mail@patentology.com.au.



Pam said...

I have just received 2 copies of their letter and I am in New Zealand. It seems like they are expanding their scam here as well.

Patentology (Mark Summerfield) said...

Thanks Pam.

Most of these scam companies operate 'virtual offices' in the countries in which they are targeting their victims, to make themselves appear more legitimate. Did the letters you received provide New Zealand contact details?


bhyqs said...

Their price has gone up to $1485 for one class and $650 for each additional class as of September 2012! Maybe they are starving for funds, but how much does it cost them to run the whole show? Maybe nothing. The guy could be running the "business" from his own kitchen.

bhyqs said...

BTW, IP Australia is fully aware of their operation. See: http://www.ipaustralia.gov.au/ip-infringement/unsolicited-ip-services/

Alex said...

I received a renewal notice yesterday (Dec 5th, 2012), and instinctively felt it was a scam despite the supposed bona fide address shown: "Level 28, 303 Collins Street, Melbourne Vic 3000, Australia".
If you compare this with the official Lodgement addresses in capital cities you will notice one subtle variation --- the word "Australia" does not appear (and why should it if we are talking about Australian capital cities). Furthermore, the fee requested is "1485 AUD for one class and 650 AUD for each additional class ..." etc.
Ten years ago I received two similar letters (I recall one of them was sent from Germany). Needless to say both were promptly shredded. A similar fate awaits this latest piece of trickery.
IP owners beware.

Patentology (Mark Summerfield) said...

Thanks for your comment, Alex.

This is the same address that I have seen on these notices. It appears to correspond with serviced offices and virtual offices operated by Regus Australia (http://www.regus.com.au/locations/office-space/melbourne-303-collins-street ). So the company does not actually need to have anybody 'on the ground' in Australia in order to maintain a local address, phone and fax number.

IP Australia no longer maintains sub-offices in the state capitals. The only local lodgement point is the Melbourne GPO. So any resemblance to former IP Australia lodgement addresses is either coincidental, or of historical interest only.

The shredder is definitely the correct receptable for these notices!


Ken Wragg said...

Yep,I got a letter today
The same crap
I called the office (Obviously a Skype number based on the ring tone, I use Skype a lot and recognise the tones)
The man who eventually answered sounded like he just got out of bed, A fair assumption given he was actually in the USA
The time there would be around 11:46 PM
I picked this as a scam immediatly as the fee was way over top and the company had no ABN
Byer Beware

Ken Wragg said...

The WHOIS search of the domain name comes up with country code LV

Patentology (Mark Summerfield) said...

Thanks Ken. Of course, you have just suggested a brilliant way to get back at these people: for the price of a local call, you can get a scammer out of bed in the middle of the night! Maybe we should organise a roster?

Jessica said...

I received a reminder letter last month which I misread unfortunately and signed it in a hurry, without realizing the consequences. Today I received the invoice and that was when I realized it's a scam. Do I have to pay the amount or is there anything else I can do?

Mark Summerfield said...

I had a client ring just the other day in a similar situation.

The scammers obviously cannot take any money from you if you do not provide any payment details. It is highly unlikely that they would pursue people who do not follow through with payment after signing the initial reminder letter, considering the shady nature of their 'business', and the fact that they probably make money mostly off the easy pickings of people who do not push back..

They have probably not incurred any out of pocket expenses themselves as yet. Trade mark renewal fees cannot be paid (in Australia, at least) any earlier than one year prior to the current expiry date. In my recent case, that earliest payment date was still six months away!

Ideally, of course, you would have your attorney look at the letter to see what you may have committed to. The usual disclaimer applies here, i.e. this is not legal advice, and it is not specific to your circumstances.


Jessica said...

Thanks Mark, I will not pay them. In my case, my trademark renew starts 02/12/2012(expire 02/12/2013). Should I renew it now by myself to stop them to do so?

Mark Summerfield said...

Well, it couldn't hurt to pay the fee before the scammers can, although I doubt they will do anything until they have money in the bank! IP Australia will refund any second attempt to pay the renewal fee.

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Stuart Miln said...

This definetly is a scam. It pays not to be panicked by their threats and official looking invoices and statements. I'd like to put them on an island with no food. Then they'd have time to think about their trying to gouge the decent. Creeps.They should be shredded.

Jo said...

I have received two copies as well...for an innovation patent that's not due for renewal. Its stated that we will need to pay 980 aud annually to keep our patent.

Jenny said...

There timing to me was perfect. Knew it was up for renewal so when got the letter I signed it as well and got invoice as was heading away so paid via Bank that day. I have now found out our Patent was never renewed and is due to expire in matter of days. Guess I have to pay AGAIN. Appears no-one can help out here.

Mark Summerfield said...

Hi Jenny,

Sorry to hear you were the victim of one of these scams. :(

If they had actually paid the renewal fees, then they at least would have been providing the advertised service, even if the price might have been questionable. Since they did not, they have defrauded you and you may at least wish to consider reporting them to the relevant authorities. The scammer is probably located beyond reach, but your experience may be able to help others avoid falling for the same scam.


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PNX said...

They provide a return envellope with no stamp required, I just filled that one up with some empty pages (actually as many as the envellope could hold) and sent it back to Australia, now they have to pay the postage from Europe to Australia. It's just a few AUD but if everybody would do that they'd run out of money pretty fast.

Bill said...

I received this scam letter today for an innovation patent renewal for a mere $980.00 !The address for return on the back of the envelope is "Mail Distribution Centre,Box 480,.SE-401 27 Gothenburg",

Mark Summerfield said...

Thanks for the report, Bill. I have not seen one of these letters originating in Sweden.

And I agree, $980 is a bit steep for an innovation patent renewal! :)

Unknown said...

Hi, our organisation received a renewal letter from this company today.
Straight away I thought it seemed a bit fishy. The return address on the envelope was for P.O. Box 701, 22000 PRAHA 120, Czech Republic.

Yet the header on the letter, and the return envelope inside stated an address on Little Collins street in Melbourne.

Unknown said...

Thanks for the data point Mia. Yes, these scams are certainly still ongoing. :(

Unknown said...

Unfortunately a reminder for renewal of trademark was signed, and now I have an invoice, I do not want this service, what should I do?

Unknown said...

If you have not yet paid any money, then don't!

The first thing to do is to find out whether the renewal fee has actually been paid. If this is an Australian trade mark, just call IP Australia and ask them. If nothing has been paid, then you have not received any service! You can pay the fee yourself, and if anybody else tries to pay they will be refunded. I doubt a scammer is going to pursue you legally when they are not actually out of pocket.

Based on other reports, it is possible the scammer will not renew your trade mark even if you do pay!

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