China Trademarks: Too Good to be True

About a year ago, American Lawyer Magazine did an article, That Law Firm’s Website Might Not Be for a Real Law Firm on “a new white paper [that] examines a growing trend of fraudsters posing as attorneys or legal consultants online to exploit those seeking legal services.”  When it comes to China and Southeast Asia, that “growing trend” has reached epidemic proportions.

I say this because in the last year my law firm’s China lawyers have seen at least a five-fold increase in the number of instances in which American and European companies have been ripped off and greatly harmed by fraudsters who advertise their “China legal services” on the internet, usually with Google paid ads.

Just to be clear, I am not talking about the sites that charge $99 (or whatever) for template China contracts that are worth less than nothing. These companies provide a joke of a product but they at least provide what they say they are going to provide. For more on that, check out. China Contract Templates for $99 Each. As far as I know, these companies do not flat out steal your money but they oftentimes can be just as dangerous. These companies lead their clients to believe they are communicating with lawyers when in fact they are not. This means there is no attorney-client privilege and the odds of whoever does your legal work knowing your situation and your goals and having the capability to draft a cross-border document or file your trademark in the right category or form your company correctly are slim.

No, I am talking about flat-out criminals and fraudsters who will take your money and claim that they did what they were paid to do and then not provide you with any services whatsoever.

And again, just to be clear, I am not aware of a single instance where a legitimately licensed lawyer from any country has done this. No Chinese lawyers. No U.S. lawyers. No lawyers from any country. As far as I can tell those engaging in these schemes are not lawyers at all, though they often claim to be.

We first wrote about fake China lawyers more than a decade ago, in China: Where Even The “Law Firms” Are Fake. That post  was on fake Chinese lawyers taking money for never-filed trademark registrations:

There are those who take money to file trademarks in China and then simply run away. A new client told me he had sent about $750 to what he thought was a legitimate China law firm to have his company’s brand name registered. As soon as the first $750 hit Shanghai, he was asked to send an additional $600 to “cover the filing fees,” which he did.

A week later the website was down and the Shanghai “firm” was gone.

It turns out this scam is actually pretty common and it also turns out that in every case of which I am aware the scammers were neither licensed Chinese lawyers nor licensed Chinese trademark agents. In other words, they are just people who run China trademark registration scams.

It has continually gotten worse since then and as foreign companies move from China to other countries in Asia (Vietnam, the Philipines, Thailand, Cambodia, Malaysia, etc.) these scammers are moving as well.  I have heard multiple accounts of foreign companies that paid for trademarks or employment contracts or manufacturing contracts  or company registrations or various other things lawyers typically do for their clients, only to receive nothing in return and only to learn that the “law firm” or the “lawyer” they paid for their legal work never even existed. How many foreign companies believe their trademarks are registered in China or in Vietnam or wherever when in fact they never were? How many think they have registered companies in China or in Vietnam or wherever when they don’t? I don’t know the numbers, but I do know that the number of these fake law firms is on a rapid rise.

It is not that hard to avoid these sort of scams. Do some due diligence before you pay/hire a lawyer, especially if you will be paying upfront for something like a China trademark or a China WFOE where it may take you years to realize you were scammed. There are fast and easy steps you can take to confirm that your lawyers actually have a law license. Every U.S. state lists its licensed practitioners online in its Bar Director and most countries have something similar. Check to see how long they claim to have been in business as compared to how long they have had their website. One fake China attorney claimed to have more than 20 years experience but his website appears to have been online for a total of only 5 months. Read as much as you can online about the lawyer or the law firm you will be hiring. If you are looking to hire an international lawyer or law firm and you have a local lawyer, enlist that lawyer to conduct the due diligence on your behalf. See China Partner Due Diligence for some of the most basic things you can and should be doing before entering into any transaction.

Don’t let yourself be the next victim. Please!

We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.