Beware – Buying Registered Trademarks From Online Sellers

When considering the purchase of registered trademarks from online sellers, beware – it’s more than likely a scam! Additionally, internet trademark auctions websites where individuals and entities sell registered trademarks from various jurisdictions, including the United States. Although some of these platforms may operate legitimately, others might offer registrations that are invalid. Importantly, the United States Patent and Trademark Office (USPTO) does not endorse or affiliate with these online auction sites.

Understanding Invalid Registrations

A trademark registration can be deemed invalid for a variety of reasons. Purchasing an invalid trademark registration means that you may not acquire any legitimate rights to the trademark. This is critical to understand because a trademark’s value is inherently tied to the trademark goodwill associated with its use, which refers to the consumer recognition and reputation linked to the trademark. Essentially, the registration itself holds no value without this consumer association.

The Necessity of Goodwill Transfer

For a U.S. trademark registration transfer to be valid, it must include the transfer of the associated goodwill. This requirement is vital as it safeguards consumers by ensuring that the quality and nature of the goods or services associated with the trademark remain consistent under new ownership. Before purchasing a U.S. trademark registration, it’s crucial to assess whether there is actual goodwill to transfer and whether the transaction includes this goodwill.

Risks of Purchasing Invalid Trademarks

Purchasing an invalid trademark registration can lead to significant legal and business challenges, even if goodwill is included in the sale. Here are some potential scenarios:

Legal Challenges: If the original owner obtained the registration through deceit, such as by making false statements about the use of the trademark, future legal challenges could arise. For instance, third parties could initiate cancellation proceedings against the registration at the USPTO or seek to cancel it through court actions.

Administrative Sanctions: If a registration is found to have been part of an attempt to circumvent U.S. trademark law or USPTO regulations, it might be subject to administrative sanctions. This could lead to the termination or invalidation of the registration, rendering it unenforceable.

Importance of Due Diligence

Just as the registration of a trademark requires careful legal consideration, so does its purchase. If you’re considering buying a trademark from an online auction, consulting with a qualified trademark attorney is indispensable. A trademark attorney can assist you in determining the validity of the trademark registration, evaluating its protectability, advising on the legal requirements for a proper transfer, and conducting the necessary transactions.

In summary, while the acquisition of a registered trademark can seem like a quick way to expand your business assets, the complexities and potential pitfalls require thorough investigation  to ensure that your investment confers the intended commercial and legal advantages.

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