A regulatory storm is shaking the cross-border e-commerce industry as over 13,000 U.S. trademarks held by Chinese sellers face potential cancellation. The U.S. Patent and Trademark Office (USPTO) has issued a Show Cause Order to Shenzhen-based agency Cheng* on September 7, marking one of the largest enforcement actions against trademark fraud.
The Investigation Details
The 646-page investigative document lists 164 pages of affected trademarks, exposing what USPTO alleges to be systemic violations by the agency:
- Unauthorized Practice: The agency allegedly engaged in legal practice without proper qualifications to file U.S. trademark applications.
- Fraudulent Filings: Submitted applications using falsified information, including forged signatures of at least three licensed U.S. attorneys.
- Account Abuse: Shared USPTO accounts among multiple users, with over 10,000 documents involved in improper practices.
Industry Fallout
The agency maintains this is routine inquiry rather than sanctions, but experts warn this reflects broader problems in China's trademark service sector. The cross-border e-commerce boom has led many agencies to enter trademark services without proper understanding of U.S. intellectual property laws.
This follows similar "black hat" practices seen in early Amazon operations, where sellers engaged in review manipulation before platform crackdowns. USPTO strengthened verification requirements in August 2022, requiring applicant and attorney identity confirmation - a regulation these recent cases appear to have violated.
Seller Protection Strategies
Affected sellers are advised to take immediate protective measures before the September 21 response deadline:
- Register backup trademarks and complete Amazon brand registry
- Consider re-filing under new business entities
- Avoid re-registering potentially tainted trademarks
- Prepare to unbrand products if necessary
Long-Term Implications
The case highlights growing USPTO scrutiny of bulk filings. Recent trademark registrations of common terms like "100%" (now causing concerns for "100% cotton" product descriptions) demonstrate increasing regulatory challenges.
Industry observers warn against using low-cost group-buying trademark services and emphasize working only with properly licensed U.S. attorneys. The potential for Amazon to later flag accounts associated with problematic trademarks remains a significant concern, as past cases show platforms may later restrict brands even after initial registration.