Brussels Criminal Court condemns trademark scam network, but the battle is far from over.
FENCER is pleased to report that it successfully represented the interests of the Benelux Association for Trademark and Design law (BMM) in a case before the Brussels Criminal Court involving misleading invoices for trade mark renewals. In a judgment of 29 April 2020, the Brussels Criminal Court sentenced a Finnish individual to 4 years of imprisonment for being part of a European criminal network making big money out of these practices. “The gravity of the facts calls for an important social signal”, the court ruled.
Back in 2011, the BMM filed a criminal complaint after being alerted by its members that several trade mark owners had received letters from fictitious companies named “ECTO” and “EPTO”. The documents indicated that EU trade mark registration were allegedly nearing the end of their 10 year registration term and were up for renewal. The letters included invoices requesting payment of a renewal fee.
The letters obviously attempted to bypass the European Union Intellectual Property Office (EUIPO), which is the competent IP office notifying trade mark owners or their agents of any renewals and fees due.
Part of ECTO and EPTO’s strategy, just like other scam networks, was to use a logo on the letterhead and the invoices that strongly resembles EUIPO’s logo, creating the false impression that trade mark owners or agents were dealing with the official authority.
ECTO / EPTO
Although in most cases ECTO and EPTO proceeded with the actual renewal of the trade marks, these companies charged exorbitant fees of several thousand euros per trade mark registration, whereas the basic fee for a renewal of a Union trade mark is EUR 850. In addition, the companies also charged VAT where those rates are exempt from VAT. The payment had to be made to a Belgian bank account, after which the amounts were transferred to Danish and Swiss bank accounts or even further, to a bank account in Hong Kong. The criminal file showed that these practices had been going on for several years and that ECTO and EPTO were part of a large structured criminal network of companies in different European countries all using the same modus operandi. The network’s illegitimately gained assets were estimated at over EUR1,000,000.00.
The court concluded that these practices “bear witness of an anti-social attitude and a course of life based solely on deception, abuse and self-enrichment to the detriment of social order and the security of trade, which are seriously disrupted by such offences”. After similar judgments in The Netherlands and Sweden, this judgment is yet another important milestone in the fight against practices that have plagued the trade mark sector for several years. Yet, the battle seems to be far from over. Paying dividends is that FENCER recently received two invoices claiming respectively 1834,50 and 2049,50 EUR of registration and publication fees for its EU own trade mark:
Both EUIPO and national authorities are very well aware of these practices. On the offices’ websites, lists are published of the companies known to have contacted trade mark owners with misleading requests for trademark publications and renewals.
FENCER calls upon all trade mark owners to notify EUIPO (firstname.lastname@example.org), local IP offices such as the Benelux Intellectual Property Office (https://www.boip.int/nl/contact) and interest groups like the BMM (email@example.com) in case of receipt of a misleading invoice or suspicion thereof.