Beware: Trademark Auction Websites and Specimen Farm Websites
Trademark Auction Websites
Internet trademark auctions are virtual marketplaces where people attempt to sell registered trademarks from around the world. Use extreme caution if you are considering purchasing a registered trademark from an online auction, as the transfer of rights may be unenforceable, and the trademark registration could be invalid or subject to invalidation.
To transfer trademark rights, a U.S. trademark must be sold with its associated goodwill (brand reputation). This requirement helps protect consumers from potential deception by ensuring that the buyer provides goods or services of similar quality and nature as the previous owner. Accordingly, a trademark sale could be unenforceable if no goodwill is transferred with the mark.
Additionally, trademark registrations sold through online auctions could be invalid or subject to future invalidation proceedings based on a hidden defect. For example, the applicant may not have any legitimate rights in the trademark that they filed, or the applicant may have submitted fraudulent specimens of use (discussed in more detail in the next section). Some defects are incurable. Even if you did not know about the defect prior to purchasing the trademark registration, you could be responsible for defending your newly acquired registration in a cancellation, expungement, reexamination, or litigation proceeding, and the registration could be cancelled.
Trademark registrations listed on online auction websites are more likely to be defective since some applicants file fraudulent applications for the sole purpose of selling their registrations on an auction website. If you are considering purchasing a trademark registration through an auction website, please contact us so that we can help you research whether the trademark registration is valid, assess the protectability of the trademark, and advise you on the conditions required for a legal transfer of the trademark, registration, and associated goodwill and rights.
Specimen Farm Websites
“Specimen farm” websites are also problematic. Sometimes applicants obtain trademark registrations through fraud by submitting specimens that were created via websites called “specimen farms.” Specimen farm websites are websites that were created for the sole purpose of producing specimens to attempt to meet the USPTO’s application specimen requirements. The websites appear to show products for sale, but they are not actually selling the products or making bona fide sales.
There are potentially tens of thousands of registrations that were supported by invalid specimens from specimen farms. Unless these improper registrations are canceled, they can block valid applicants from registering their trademarks and can also be sold to unwitting buyers on auction sites.
You can identify an invalid specimen of use originating from a specimen farm by going to the specimen website and searching for features that are atypical of legitimate e-commerce websites. For example, the “Contact Us” page may only identify a location of “USA,” the contact number may not have enough digits for a U.S. phone number, the price of the goods may seem unusually high or low, or there may be a wide variety of products that are not organized by category or brand. The website may also contain lots of typos or unusual formatting or language, and the product descriptions may not match the products shown. You can also try clicking on the links on the website to see if they work, and you can see if the main webpage of the e-commerce website is reachable by shortening the URL provided for a specific product.
If you identify a trademark application or registration that includes an invalid specimen from a specimen farm, this can serve as a basis for challenging the mark based on non-use or fraud on the Trademark Office.