Fraudulent invoices, a worrying trademark scam

Faced with cumbersome administrative procedures and numerous incoming letters, companies are facing a very worrying kind of fraud. This takes the form of fraudulent invoices from companies pretending to be official bodies domiciled abroad in order to collect payments for trademark services.

Fraudulent invoices

While rationally, companies are cautious about their accounts and the payment of their invoices, fantom organizations claim payments, alleging to have served as intermediaries for a trademark registration. This practice is ultimately simplistic for these crooks because when a national or European trademark is registered, the trademark will be published in an official gazette such as the BOPI. The criminals then only have to obtain the contact details of the applicants from this publication, , photocopy the announcement and then send them an invoice that they will pay thinking that it is for the costs related to their trademark applications.

The culprits

Many players active in fraud have now been identified, which can help avoid falling into the trap of such fraudulent schemes. The culprits are notably known as Globus Edition SL, Global Edition, Edition the Marks or Trademark Publisher with which the trademark offices, in particular INPI, have no links. Moreover, the services offered by the latter have no official character and are therefore devoid of any legal effect.

A case law favorable to companies

Faced with these fraudulent practices, a case law has gradually emerged in favor of companies. Already in the year 2000, French judges sentenced two Austrian crooks attacked by the INPI. In 2017, the Svea Court of Appeal in Sweden, following a judgment by the Uppsala District Court, sentenced twenty people. This conviction follows the issuing of false invoices between 2011 and 2014 by what appeared to be the European Union Intellectual Property Office (EUIPO) to hundreds of addressees in various States following their applications for registration of a Community trademark with EUIPO. Following the receipt of these invoices, the financial services of the victim companies did not notice the fraud and paid the amount considering them official invoices.

Looking at the facts, the judges considered that “these letters were designed to mislead the recipients by making them pay for something of no value”, explaining their convictions for fraud offenses. However, companies must be extremely vigilant to the risk that such crooks will not be convicted in court for lack of clear evidence that payers were indeed being misled. Indeed, some fraudsters were able to avoid heavy convictions since, in certain cases, the proof that the companies were, in fact, misled was not reported.

The recommendations

Faced with this phenomenon, the EUIPO provides a tool to identify fraudsters via its “false invoices” page. In addition, it is strongly recommended that employees be informed and that proper internal approval procedures are in place before any payments are made. Indeed, these frauds are facilitated since internally, the services making the payments are not those who know the brand. Fraud awareness is essential, because beyond trademarks, patents and domain names are also victims of these scams. As a precaution, companies should be aware that, for example, only the INPI intervenes in patent matters. Therefore, an invoice from any other entity must raise suspicions. Confronted with these suspicions, WIPO, EUIPO and all national offices and councils are at the disposal of companies in order to advise them on the best way to avoid fraudulent maneuvers.

Faced with countless attempts of fraud affecting companies, these companies must be very vigilant about their intellectual property rights and all related elements such as their invoicing. Dreyfus & Associés is dedicated to providing you with all the requisite advice on trademarks and to protect you from any related damage, and is the ideal partner to accompany you in implementing your security strategy.

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