“Disgusting fraud” – USPTO targets Trademark Terminal operator Abtach with scathing show-cause order

• USPTO issues strongly worded show-cause order to Pakistan-based Abtach Ltd
• Alleges company operates dozens of fraudulent low-cost trademark filing agencies
• Evidence suggests Abtach representatives improperly altered USPTO documents to charge victims higher fees

In one of the biggest anti-fraud crackdowns in its history, the USPTO has issued a strongly worded show-cause order to Pakistan-based company Abtach Ltd, the operator of numerous controversial low-cost filing agencies including Trademark Terminal. In exclusive comments to WTR, US trademark commissioner David Gooder says the move is part of the registry’s anti-fraud efforts and will “protect trademark filers”.

The show-cause order was published by the USPTO to senior executives of Abtach Ltd and its subsidiaries 360 Digital Marketing and Retrocube. The companies are accused of violating the USPTO’s rules of practice in activity related to dozens of low-cost trademark filing agencies (listed below). The most prominent of these is Trademark Terminal, a platform that WTR has reported on since February 2021, including evidence that it was linked to unusual activity on thousands of US trademark applications, that it had spent thousands of dollars on Google Ads and that a related entity allegedly defrauded one victim out of nearly $150,000. Last month, our reports revealed that Trademark Terminal had paused its filing operation, while three new active entities were subsequently discovered.

Despite claiming to be based in the United States, WTR has repeatedly highlighted that Trademark Terminal (and its sister platforms) appears to be based in Pakistan. In July, more evidence came to light that directly linked the operation to Karachi-based IT company Abtach Ltd. Tellingly, Abtach had been accused in its home country of bribing a representative of the Pakistan Federal Investigation Agency, which had been investigating the firm for alleged money laundering.

The USPTO show-cause order confirms – using the office's own internal data – that trademark filings were submitted “from IP addresses corresponding to an internet service provider in Karachi, Pakistan”. Scathing language further accuses Abtach executives of engaging in “an egregious scheme to deceive and defraud applicants for federal trademark registrations by improperly altering official USPTO correspondence, overcharging application filing fees, misappropriating the USPTO’s trademarks, and impersonating the USPTO”. The order lists thousands of trademark applications that were filed by entities allegedly operated by Abtach.

The accusation that Abtach’s platforms improperly altered USPTO documents is a startling new revelation. It was previously known that representatives for Trademark Terminal (and sister entities) were not providing the email address of the applicant on US trademark applications, but rather putting an email address linked to the filing entity. The reason for this was unclear – until now. The USPTO alleges that this strategy ensured applicants did not receive USPTO communications directly from the registry, allowing Abtach representatives to receive the documents (eg, filing receipts and subsequent office actions), modify them with higher fee amounts, and then overcharge the applicants and “pressure them into paying for unnecessary services”. In one example revealed by the USPTO, a client received an ‘invoice’ that appeared to be issued by the USPTO that listed an inflated ‘USPTO filing fee’ of $776. This was “not an isolated incident”, the USPTO added. The practice of doctoring official correspondence in an effort to inflate fees appeared to be “standard business practice” among Abtach’s operations.

Talking to WTR about these allegations, Ryan Bethell, managing partner of the Ideas Law Firm (which operates Trademarkelite.com), says that he is “disgusted by the extent of the fraud”. “Lying to their clients about the government filing fees, even doctoring the filing receipts from the USPTO that were sent to clients – I suppose it now makes sense why you would not want to list the applicant’s email addresses on the applications if you were altering the filing receipts and inflating the fees prior to forwarding those to the applicant," he adds.

Other aspects of the allegedly fraudulent activity are equally disturbing. The USPTO claims that Abtach-owned logo design entities sent letters falsely purporting to be from the USPTO, which used an official-looking USPTO letterhead and claimed that someone else was seeking to register the recipient's name, logo or slogan as a trademark. The letters stated that the client had “72 hours” to file a trademark “or else the USPTO will register the mark to the other applicant”. The USPTO also confirms Abtach entities' use of Google Ads, claiming that they “advertise extensively” and “tout falsely low fees (starting at $99) and timeframes (7 minutes) to register a trademark”, with some ads claiming that their services “are endorsed by the USPTO” (as reported by WTR in May). There is also evidence that Abtach representatives are “improperly entering the electronic signatures of others on TEAS submissions to the USPTO”.

In summarising the numerous allegations, the USPTO concludes that Abtach's operations reach a level of fraud to warrant sanctions and that Abtach representatives “are engaged in a continuing pattern of knowingly making false material representations of fact in connection with applications to register marks with an intent to deceive the USPTO”. For that reason, it proposes a number of sanctions, including:

• permanently precluding Abtach representatives from submitting trademark-related documents to the USPTO;
• removing correspondence information associated with Abtach-linked representatives from the USPTO’s database in all trademark applications and/or registrations in which such information appears;
• striking (or otherwise giving no weight) to all trademark-related documents submitted to the USPTO by Abtach-related representatives (including all submissions filed via ‘USPTO.gov’ accounts associated with them);
• terminating all ongoing proceedings containing submissions filed by Abtach-linked representatives;
• permanently terminating or deactivating any ‘USPTO.gov’ accounts in which contact information related to Abtach-linked representatives appear and taking all reasonable efforts to prevent the creation of further accounts; and/or
• continuing to strike documents, remove information, deactivate accounts and terminate proceedings containing submissions that are later found to have been linked to Abtach.

Abtach Ltd has until 17 November 2021 to submit a response to the show-cause order. WTR has reached out to the organisation on multiple occasions but has never received a response. 

The evidence in the show-cause order reveals that thousands of trademark applicants have been affected by the alleged actions of Abtach. WTR understands that all the trademark applications listed in the order will be suspended until a final determination has been made concerning sanctions. A notice of the suspension will be issued to all correspondence emails that the USPTO has on record, while a copy of the order will be uploaded into each application's electronic records. It is unclear if, or how, the USPTO will attempt to contact the applicants individually, as a high proportion of applications do not include the applicant's personal email address. As such, many victims will be unaware of the Abtach scheme and will face losing their trademark rights.

In comments to WTR, US trademark commissioner Gooder says that the order “is another example of our comprehensive anti-fraud efforts to protect trademark filers and the integrity of our vital trademark register”. Bethell agrees, saying the order “is very thorough and a great start”. Indeed, due to the severity of the fraud, the next step should involve the US Ambassador to Pakistan addressing it directly with his political counterpart, says Josh Gerben,  founder of Gerben Law Firm. “Given that this fraud is being done from another country, getting the US Ambassador involved would be very important to getting the Pakistani authorities to take law enforcement action,” he concludes.

The full show-cause order can be read on the USPTO website.

Previous WTR coverage on issues related to Abtach-owned entities can be read below:

• Trademark Terminal: concern grows over mysterious low-cost trademark filing entities (1 February 2021)
• Concern grows over low-cost trademark agencies in wake of USPTO fraud case (23 February)
• USPTO urged to set up task force to address scams following massive Pakistan fraud case (1 March)
• ‘The public is not being protected’ – Trademark Terminal shifts USPTO strategy as concern over practice continues (11 March)
• “Money flushed down the toilet” – customers decry low-cost agency Trademark Plus (17 May)
• Revealed: how controversial low-cost online trademark platforms dominate paid Google search results (27 May)
• Concern voiced as low-cost filer Trademark Terminal launches new platforms (10 June)
• Scammed out of $150,000: allegations of fraud, threats and USPTO impersonation (23 July)
• USPTO urged to protect its own brand in fight against fraud and scams (4 August)
• USPTO seeks federal trademark registration to help tackle “growing problem” of filing scams (5 August)
• USPTO pledges fraud fightback after scathing report into US trademark registration process (18 August)
• Trademark Terminal pauses filing operation, as evidence suggests USPTO cracks down (26 August)
• New low-cost filing platforms with striking similarities to controversial Trademark Terminal target US applicants (13 October)