What you need to know…

When you file a trademark, patent or copyright with the US Patent and Trademark Office, US Copyright Office or other IP-related government entities, your application becomes public information and anyone can access these databases. So-called marketing companies take your information and then solicit their victims via email or regular mail for services seemingly related to intellectual property or domain name registrations – services that you don’t actually need.

The solicitations may include:

(1) Offers for legal services to file your IP in another country.

(2) Trademark monitoring services

(3) Invoices for renewals (coinciding with your registration dates)

(4) Recordation fees for trademark registration with U.S. Customs and Border Protection

(5) Offers to include your trademark listing on private registries or directories

(6) Invoices for foreign registration

(7) Notifications that an unauthorized 3^rd party seeking to register your trademark or domain and will be approved unless you respond and pay the listed fees

These companies send out notices and invoices under official looking letterhead and often times, use government sounding names such as the “TM-Collection – International Register of Trademarks-Hungary,” The Asian Domain Registration Service” or “US Customs and Border Protection (CBP) Bureau.” Oftentimes they use scare tactics such as:

another company is attempting to register your intellectual property in their country and that if you do not respond, we will assume you have authorized this registration. Click here for more information on this scam.

Other times these scammers will simply send you an invoice in order for you to register your trademark from Hungary, for example, (in the amount of $1650.00 or otherwise be advised that you that you will lose your rights to register in the future).  Again, the solicitations are worded in such a way so as to appear that these fees are an ordinary charge and that you are obligated to pay to protect your intellectual property.

Alternatively, victims who already own a “.com” domain name are warned by so-called international domain registries that they need to buy all of the other variations from .net, .biz, .cn ,etc. in order to protect their trademarks within their countries. The truth is that you don’t need the help of these officious third parties as you can easily register alternative domains yourself with reputable registrars in your home country for a few dollars each a year.

If you receive any kind of renewal or listing notice, here are the six basic things you should do to avoid a scam:

• Check the source of the official correspondence – communication from the USPTO will either come from an address in Alexandria, Virginia or an email return address would end in “@uspto.gov.”
• Research the exact name of the organization that sent out the invoice and see whether they show up on any watch lists (or simple google their names)
• Read every word of the document. If it’s a “legal” trick, it will say somewhere (even in very small print) that it’s a solicitation, not an official invoice. You will probably note bad grammar and misspelled words in the solicitation as well.
• Know the normal maintenance filing deadlines and requirements associated with a U.S. Trademark — which typically occur between the 5^th and 6^th year after registration and again between the 9^th and 10^th year.
• Trust your instinct. Maybe the due date seems too soon? Maybe the due date has already passed? Maybe the details in the “notice” are limited and include no contact phone number?
• Work with your lawyer or other provider to help verify the authenticity and accuracy of any invoice or before paying it.

IP scams have become so rampant that that government entities have begun issuing warnings to advise intellectual property holders to be aware. Click here for the USPTO official warning. The World Intellectual Property Office also maintains a database containing samples of scam letters and invoices. Click here for samples of these “scam” invoices. You may also file an online consumer complaint with the Federal Trade Commission www.FTC.gov and/or email the USPTO @ TMFeedback@uspto.gov.

Readers, be on your guard for this new surge in patent, trademark and domain registration scams deigned to trick inventors and businesses into paying hundreds or even thousands of dollars for bogus services.  Feel free to email or comment on this post if you’d been the target of one of these scammers.

Since mere ideas cannot be protected with patents, trademarks or copyrights, to get a concept off the ground with the support of others involves a certain degree of risk. You may need to share your ideas with vendors, investors and maybe a partner or a mentor. So how do you protect your ideas at this critical stage of development? Most would reply:  sign an NDA.

Yet, the NDA is the most overrated document in today’s business. Its purpose is to discourage someone from sharing or using your ideas under “penalty of law” but it does not prevent unlawful disclosure.  Indeed, in the age of digital communication where we can easily email, post or tweet, it may be nearly impossible to track (or prove) the source of the information leak. Yet lawyers continue to encourage the use of NDAs as a precautionary measure, in spite of its questionable effectiveness.

Protecting Information Internally. As far as Employees, directors, attorneys, accountants and other individuals that have been placed in a position of trust, state law imposes upon them a duty of loyalty — an implied obligation to keep your trade secrets and internal communications confidential and to not take actions that will cause your company harm. While confidentiality agreements are useful insofar as they specifically spell out the obligations of confidentiality and/or non-compete, even without a signed NDA, you take legal action against them to enforce their obligations.

Protecting Information Externally (e.g. contractors, potential investors, suppliers and other third parties). While there are limited state laws that impose obligations on third parties, An NDA is only as valuable as your ability to enforce it. For example, if you can’t afford to hire a lawyer to sue someone in court, chances are, you won’t be able to stop their unauthorized disclosure or theft of your ideas. And even so, can you prove it? The most common defense is that the information was developed independently. Let’s assume for a moment that you were to win your case, while you may be able to stop them from exploiting your ideas, damages may be hard to calculate – particularly if the information leak at issue is a plan or a concept that has no value other than the idea itself.

In short, NDAs are the equivalent of a handshake in documented format. It may have the effect of deterring someone from sharing your confidential information but it does not prevent it.

In my opinion, the main value of an NDA is to act as a starting point for new business discussions. It also provides verification of each party’s identity (corporate details, state of incorporation, the name and signature of an authorized representative.

In the context of today’s business environment, one may think of NDAs as a Neurotic Delusional Approach toward innovation:  an illusion of greatness in one’s ideas that gives rise to insecurity that the idea will be misappropriated.

NDAs are not a substitute for trust or good judgment. Use discretion regarding who and what to share – if you don’t think you can trust them, they are not the people you want to work with.

That being said, a great idea is worth sharing and innovators need to open up conversations with industry much earlier and disclose knowledge-based propositions pre-contract. Otherwise, be willing to put your idea in the public domain and let innovation take its course.

For alternatives to protecting your ideas and intellectual property, check out apps that use barcodes to authenticate, attribute & protect innovation concepts disclosed to third parties and their completed creative works displayed online.

Leave me a comment and share your thoughts with me on the value of NDAs. Or visit my website www.paulabrillson.com.