May 31 (Bloomberg) -- While entrepreneurs can file trademark applications with the U.S. Patent and Trademark Office (USPTO) on their own, many pay attorneys $150 to $500 per hour to handle the complex process. Since Trademarkia made its debut in 2009, the legal website has streamlined and made the task cheaper.
Its major technology innovation is a powerful search engine that mines the USPTO trademark database more efficiently than the government’s own search tool, says co-founder Raj Abhyanker. “Our site lets users visually search and receive alerts for more than 6 million trademarked names, logos, and slogans from the year 1872 until today, all for free. The USPTO site only lets you search from the year 1932 and it is not an easy site to navigate.”
Trademarkia’s business model is classic upselling: Individuals searching for trademarks via Trademarkia are urged to sign up for a trademark-application filing service with Abhyanker’s law firm. After agreeing to pay $159, the user fills out the trademark application and Abhyanker’s 20-attorney Mountain View, Calif., law firm reviews it to determine its chance of being granted. The total cost for a fairly straightforward, narrow application is around $500, including the government’s trademark registration fee of $325, Abhyanker says. His law firm brought in $2.7 million in 2010, excluding $5 million in pass-through government filing fees it sends to the USPTO, he says. The Trademarkia website, established as a separate business entity from the law firm, had around $400,000 in revenue in 2010 and expects over $1 million this year, he adds.
Co-founded with software developer Dongxia Liu, Trademarkia’s traffic is exploding, with more than 1.2 million monthly unique visitors, Abhyanker says. “Trademark Insider,” a publication that ranks trademark data from the USPTO, shows that Abhyanker’s law firm jumped to No. 1 on its top 100 list in 2010, from 91 in 2009. USPTO data shows that in 2010, 280,649 unique trademark applications were filed in the U.S. If Abhyanker’s firm handles 6,000 this year, as he expects, it will be responsible for more than 2 percent of the applications filed in the U.S.
A STORM OF COMPLAINTS
In recent months, the San Francisco native has been the object of intense criticism on blogs and forums, mostly from intellectual property attorneys who file a handful of trademark applications annually. Much of the fury has been registered on blogs and boards associated with the International Trademark Association (INTA), the professional group for trademark lawyers. Among the chief complaints: Trademarkia’s online agreement doesn’t adequately explain to clients that they are hiring Abhyanker’s law firm. It charges a flat fee without identifying problems that could make a trademark application more complicated and costly. His volume business model inherently deprives clients of adequate time for legal counsel. INTA Executive Director Alan C. Drewsen declines to comment on Trademarkia. The group’s spokeswoman, Jessica Tuquero, says that any INTA members’ criticisms reflect their own opinions and not INTA’s views on Trademarkia.
The opinions aren’t sugar-coated. The site sends myriad e-mail blasts that are not merely annoying, but get basic facts about trademark law wrong and do not adequately disclose that they are solicitations for legal services, says Owen Smigelski, senior counsel at Sunrider International, a Torrance, Calif., nutrition company. Amanda Mooney, a senior associate at Irvine, Calif., law firm Burkhalter Kessler Goodman & George, says she works with entrepreneurs who were confused by Trademarkia’s publication service. One client thought he had filed three trademark applications through Abhyanker’s firm when in fact, he had paid $159 each to have three pending trademarks published on Trademarkia’s website, she says. “It turned out they were sold on paying $159 for the right to have their marks published in this internal service that has no utility and does not establish use in commerce rights,” Mooney says. “That bothers me.”
Abhyanker defends his qualifications, his marketing practices, and his business model. He dismisses critical comments as the spiteful ramblings of attorneys who are jealous of his success and feel disenfranchised by Trademarkia’s innovations. “A lot of lawyers are fearful because we’re changing the way the paradigm is done. They’re making stuff up and mischaracterizing us in an effort to bring us down,” he says. “We’re trying to uphold the highest ethical principles and trying to upgrade the quality of the applications.”
“HUGE LEAP FORWARD FOR EVERYBODY”
Enrico Schaefer, founding attorney at competitor Traverse Legal, an Internet law and intellectual property firm in Traverse City, Mich., that has closely monitored Trademarkia’s evolution, says its search function is “a huge leap forward for everybody.” In terms of its trademark filing services, which compete with Schaefer’s own intellectual property practice, Abhyanker has lowered the cost dramatically for the smallest startups, Schaefer says. He calls Trademarkia the next logical step in the Internet democratization process that is empowering entrepreneurs and lowering costs for services that were traditionally the purview only of highly paid experts such as attorneys.
Schaefer, who previously worked at a law firm that billed by the hour and could charge as much as $3,500 for trademark services, established a flat fee of $1,500 when he started Traverse in 2005. He says there is “legitimate debate” about whether Trademarkia’s unique terms and services agreement provides adequate notice to people who sign it that they are not just ticking off a routine disclaimer but actually hiring Abhyanker’s law firm. Still, he dismisses “80 percent” of the griping about Trademarkia as coming from attorneys who feel threatened. “Big, established firms would rather keep it a good old boys’ club where average people didn’t have legal information and had to go to an attorney in a suit who had all the information. The legal consumer is 100 times better off today than they were in 1995 or 2000, and things are never going to go back to the way they were then.”
Abhyanker is now turning his focus to fighting what he calls “ridiculous” legal challenges to startup companies by “trademark bullies” -- large brands that routinely send cease-and-desist letters to entrepreneurs, even when there is no likelihood that the startup will be confused with an existing brand. In March, an attorney in his law firm, Benjamin Ashurov, established a website, Trademarkbully.com, as a public forum for small companies that have been forced to withdraw trademark applications, cease their business operations, or change their company name under threat of a costly legal battle with a deep-pocketed corporation. Abhyanker, 35, hopes to encourage small companies to take a “strong position” and not back down, adding, “the large company may back off or offer to buy the mark.”
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