UNITED STATES: Serious Sanctions Imposed on Foreign Trademark Filer

The United States Patent and Trademark Office (USPTO) has taken the unusual step of imposing sanctions on a foreign company and its executive director for their “conduct involving submission of thousands of documents in trademark matters in violation of the USPTO’s rules of practice in trademark matters … and USPTO website terms of use.” In re Zhang, Dec. 10, 2021, Gooder, D.

On June 8, 2021, the USPTO’s Deputy Commissioner for Trademark Examination Policy issued an order requiring Shenzhen Huanyee Intellectual Property Co., Ltd. (Huanyee) and Yusha Zhang, Huanyee’s executive director (respondents), to show cause why they should not be sanctioned for such conduct. The respondents submitted a response to the show-cause order on July 6, 2021. After considering the response, the USPTO Director found that imposing the sanctions proposed in the show-cause order was appropriate.

According to the USPTO’s sanctions order, “Respondents have been involved in filing submissions in more than 15,000 trademark matters before the USPTO.” In connection with those filings, the order states, “Respondents have engaged in the unauthorized practice of law, provided false domicile information for applicants, impermissibly entered the signature of the named signatory on declarations and verifications, and violated other USPTO Rules and the USPTO’s website terms of use.” The sanctions order says that the response to the show-cause order either does not address such conduct or concedes that the respondents engaged in it.

The sanctions that the USPTO imposed included termination of “all trademark application proceedings involving submissions by Respondents or filed through a uspto.gov account registered to or controlled by Ms. Zhang or any officer, employee[,] or agent of Huanyee.” The records for all affected applications and registrations will be updated to include the sanctions order, and “[a]ny pending post-registration submissions will be given no weight.” Moreover, “Ms. Zhang and any employees, officers, or agents of Huanyee may not prepare, sign, or submit trademark-related documents on behalf of others under any circumstances.”

To prevent the respondents from making further U.S. trademark filings, the USPTO plans to “remove correspondence information associated with Respondents in the USPTO electronic records for all affected applications and registrations in due course.” And finally, the USPTO directed its Office of the Chief Information Officer to deactivate permanently “any USPTO accounts in which contact information related to Respondents appears” and “to take all reasonable efforts to prevent Respondents from creating or activating further.”

The USPTO’s sending of an email notice about this decision despite the respondent’s claim that “the Privacy Act [5 U.S.C. § 552a] absolutely prohibits disclosure of information concerning this matter” may indicate that the USPTO hopes the severe sanctions it imposed in this case will deter or at least discourage other foreign firms from engaging in similar prohibited conduct.

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