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First Government Lawsuit Against a Patent Troll
walterbyrd writes "Late last year, a vigorous and secretive patent troll began sending out thousands of letters to small businesses all around the country, insisting that they owed between $900 and $1,200 per worker just for using scanners. The brazen patent-trolling scheme, carried out by a company called MPHJ technologies and dozens of shell companies with six-letter names, has caught the attention of politicians. MPHJ and its principals may have gone too far. They're now the subject of a government lawsuit targeting patent trolling—the first ever such case. Vermont Attorney General William Sorrell has filed suit in his home state, saying that MPHJ is violating Vermont consumer-protection laws."
Sure, but I patented the process of suing patent trolls. Pay up.
ho hum
wake me when the feds file suit
I would say that pulling out innards from a tiny hole for coyotes to eat (a la Blue Duck) would not constitute cruel and unusual punishment.
while(1) attack(People.Sandy);
The MPHJ letters also include misstatements. First, they imply litigation was imminent, stating recipients could be sued if they don't pay within two weeks, and they include draft complaints. Still, MPHJ hasn't filed a single lawsuit, in Vermont or anywhere else, more than 130 days since Vermont businesses starting getting the letters.
Also, the shell companies each state they have an "exclusive license" letting them enforce the patents against businesses within a specific geographic area. But the Vermont complaint states that "each Shell LLC was actually assigned a combination of geographic and commercial fields that was identical to at least one other Shell LLC," and thus the shells "do not possess exclusive licenses." The letters also state that "many" or "most" businesses show an interest in purchasing licenses, which isn't true, the complaint notes.
If I got a letter with that kind of language from an entity that has a name that looks like it was spewed out by a random letter generator, I'd chuck it into the trash thinking it was a scam. Because there are TONS of scams where "companies" bill for office supplies and other services that were never received with the hopes that the recipient would just pay it.
This is not neccesairly that good. I would rather see law change that prevents trolls. This development can easily evolve to a tool where large rich corporations will buy politicians to shut down legitimate small inventors. Generally I don't like governemtn to decide who is and who isn't a troll.
I applaud this.
Hopefully, it will catch on.
Down With Slashdot BETA!!! I've been around the corner and seen the oliphant; you can only abuse me from your perspecti
Sure, but I patented the process of suing patent trolls. Pay up.
Why? That's a little cynic/pedantic if you ask me.
See, this sets a state-level precedent for individual states to go after trolls. It is also easier to initiate as opposed to the Feds initiating it and the trolls cooking some stupid shit like the Feds lacking jurisdiction (arguing that it is a states' right manner, hard to argue, but in our systems of laws you can keep throwing shit against the wall till something hopefully sticks.)
Company come along in various guises through various subsidiary and makes vague patent claims against companies further down the chain demanding money.
How is it any different from the patent fraud Microsoft has been perpetrating against Android?
It's great to hear that these patent trolls are being held to account, but it looks like it is being done under consumer protection laws. Yet the real problem isn't consumer protection. The real problem isn't even patents. The problem is an abuse of the legal system that has the potential to undermine the legal system, particularly in the public mind since they used the threat of legal action. (It would undermine the legal system in practice if they actually followed through with those threats.)
For a lawyer to cook up this operating scheme strongly suggests that what he is doing is technically legal in the sense that it is likely within the letter of the law.
If nothing else defines what is wrong with the notion that "legal == right" this does. (Yes, I know there are things that do this better.)
I think a very simple law should be put into place which outlaws "NPEs." That would put a dent in the operations of these low-overhead trolls. But it would serve to embolden a select few who would claim to have a failed business based on their patent holdings and seek out damages from these others who are 'doing it better.'
There is no single silver bullet. But reforming the patent system, which effectively lies about the human condition by suggesting that nothing would be invented without a profit motive, one or more failing aspect of the patent system would be addressed.
The more I think about it, the more I think that any such "NPE" limitations should be carefully considered. Such measures threaten to raise the bar preventing pedestrian inventors from participating in the patent system leaving it available only to big business.
I think it will be difficult to stop the trolls without hurting real people.
I wouldn't be surprised if the troll wasn't someone expecting to get money out of the practice, but rather some person or company sick of the flaws in the patent system, how easy it is to abuse patents, and how hard it is to get the government to take action on fixing it. Maybe someone just wanted to draw attention to the issue to have patent law locked down a little better to prevent such activities. I imagine someone writing all these letters, chanting all the while, "Stop letting me do this!"
Nobody cares. Not even a little.
That is bizarre, your quote is from the FP and not the post you actually replied to.
I'm a good cook. I'm a fantastic eater. - Steven Brust
I patented that, and response to such occurrences, so pay up.
rewriting history since 2109
Because what's being sold isn't the product in the spam, but the idea that it could.
Marketing don't care if it doesn't actually work, there are plenty of reasons why anything doesn't work that is entirely not their fault. Add to that it would be impossible to find out of a spam mail actually made someone buy it and you have the result that the people dumb enough to fall for Spam DOESN'T HAVE TO EXIST.
All that has to happen is that someone has to be dumb enough to believe that anyone else is dumb enough to respond to spam and that person has to be in marketing.
That's all.
And marketing "know" that people are morons. Not THEM, obviously, but everyone else. That's why everything is marketed now for the lowest-common-denominator, MTV-10-Second-Attention-Span "Jenny Housecoat" now. TV, Movies, Games, Books, whatever. Because marketing think that everyone IS that sort of idiot and, moreover, cannot and will not enjoy or even try something hard like thinking.
Of course, Matrix and Inception come out and shock "the critics" by doing better than they expected, because they all believe that people are just plain dumber than they are. Not THEM, of course. Just everyone else.
So the spammer comes along and sells the idea that spam works and the marketer, "knowing" that everyone else is dumber than a custard brick, ignores the fact that THEY wouldn't fall for it in a second, and pays the spammer to do this. Marketer now thinks "Job Done, collect the bonus!" and the spammer knows "Job Done, find another sucker!".
Whether it works neither cares a toss for.
Seeing as every multifunction machine uses this and the government can't function without them now I feel this would be a good application of "Eminent domain" for the state to seize the patent for public use.
I'm glad to see Vermont have passed the related legislation, initiated this lawsuit and hope they kill the troll. Quite frankly the legislation needs to be far stronger. If someone sues over a paten without actively marketing or producing a product with said patent then they should be considered a patent troll. Ideas are a dime a dozen. It is implementation, production, marketing and sales that bring the products to the users. The whole patent system should be simply eliminated. It was designed for a time when a much longer term was needed. Now that does not make sense with the rapid changes in technology and with the abuses of the system. Simple fix: eliminate all patents including all existing ones as well as not allowing new ones.
It is also easier to initiate as opposed to the Feds initiating it and the trolls cooking some stupid shit like the Feds lacking jurisdiction (arguing that it is a states' right manner, hard to argue, but in our systems of laws you can keep throwing shit against the wall till something hopefully sticks.)
True, but this clearly involves inter-state commerce, making it indisputably federal jurisdiction. There's just no federal laws they can really go after these fuckers for violating. Individual state consumer protection laws are pretty much the only thing a state AG can go after them for that has a viable chance of succeeding.
Now if they abuse the MIT network to download a massive number of academic journals to which they have legitimate access, it may be a different matter.
Just start handing these letters over the the Fed. and screaming mail fraud.
This is especially applicable in the Project Paperless lawsuit where the plaintiff just walked away. They pulled the trigger on the lawsuit, retaliation is required! Disbar the lawyers and let them spend some time in Fed Supermax as an example.
"There's just no federal laws they can really go after these fuckers for violating."
RICO
http://www.wisegeek.com/what-is-rico-law.htm#did-you-know
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
I was talking with somebody else about this a couple of weeks ago and they said "If I ever received a letter from a patent troll trying to extort money from me, I would respond in a very serious way, and I don't care if it's legal or not."
Clearly people have had enough, and feel they have no recourse by due process. I imagine there will be a lot of company officers and board members in harms way in the near future.
Depends. What you have described suggests a case of correct application of patents, and I'm assuming that your example patents are valid (things that really are patentable).
While the troll act like a mobster, claiming to have patents on things unpatentable, obvious or clear cases of prior art. It relies on the fact that the U.S. courts have the ridiculous detail you have to pay dearly to defend himself from false accusations, and that therefore it would be cheaper to pay the troll demands than defend themselves in court.
PS: I think is a better idea just do not go in the "lawyers game", simply blow off the troll head.
Religion: The greatest weapon of mass destruction of all time
What a ripoff.. I wouldn't pay those guys a penny over $699.
Whoosh...right over their heads again. This should be modded +5-Funny except that /.ers have obviously lost all trace of any sense of humor.
Another AC
RICO can only be used if they can prove you also committed another crime. Which means somebody has to convict these guys of something before ANY conspiracy charges stick, much less RICO which only applies to certain crimes.
None of those crimes seem to be relevant to Vermont's lawsuit.
I will just assume your reply went to the wrong post as well.
I'm a good cook. I'm a fantastic eater. - Steven Brust
Extortion would be relevant. Organized extortion efforts across the nation would be very relevant. What's going on here is very much the same as a protection racket. "You pay me $100/week, and your home won't be broken into." Except, it's "You pay me $xxxx and you won't have to defend yourself in court." It's outright extortion.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
You provided goods / services whether directly or indirectly via that patent. Not trollish in the least.
That said, there needs to be (time) limits. We, as a society, do not need your grandchildren having a right to sue for having done nothing but being your relations.
That's a stretch.
They have this patent. That means they have the right to sue you for infringing it. That means they have the right to tell you "we will sue your ass if you don't pay us." To be extortion they'd have to threaten actual violence.
The legal options to thwart them are basically a) creative prosecutions such as this one, and b) patent reform. Since the Federal government runs patents, and the Federal government is designed in such a way that reform requires lots of people to really want it, b) is not a practical option.
It went to every post just in case.
rewriting history since 2109
Sure, they said that most other companies were settling and that they were ready to follow with real lawsuits.
Both of these are perhaps less that true.
But the primary deception was likely in crafting an amgibuois patent on an existing technology,
convincing the patent examiner that it had a narrow scope to be allowed
and then turning around and telling their victims that it had a broad scope and so applied to them.
Telling the same story two conflicting ways for your convinience is deception.
Hopefully, they have to live with both.
The broad scope might cause the patent to fail a post grant review.
The narrow scope might open charges of extortion.
Should be interesting to watch.
They have this patent. That means they have the right to sue you for infringing it. That means they have the right to tell you "we will sue your ass if you don't pay us."
Actually, they probably don't. They're not sending out threatening letters themselves, but are using forty different shell companies to send out their threats. That's intentional obfuscation. It's the sort of thing you'd do if you didn't actually hold the rights you're claiming.
And if they do own a patent, any patent, it isn't going to be for the end use of scanners. That is (pardon the pun) patently ridiculous. Of course, that would still need to be borne out in court, and the victims would need to shell out cash to lawyers to prove it.
To be extortion they'd have to threaten actual violence.
I'm not an expert in law, but this statement seems dubious. I wonder what it would take for this to be deemed extortion.
From Wikipedia
Under United States federal law extortion can be committed with or without the use of force and with or without the use of a weapon. A key difference is that extortion always involves a written or verbal threat whereas robbery can occur without any verbal or written threat.
Neither extortion nor blackmail require a threat of a criminal act, such as violence, merely a threat used to elicit actions, money, or property from the object of the extortion. Such threats include the filing of reports (true or not) of criminal behavior to the police,
This is a threat, not including violence, used to elicit money from another party and includes the threat of filing reports (probably quite false) with... not the police, but the judiciary.
I doubt the courts will be willing to besmirch their bread-and-butter with the term "extortion", but this is extraordinarily close to what's happening.
I won't join Slashcott. OTOH, If Beta goes live, I just won't be back until it's fixed. Sorry Dice.
You cared enough to reply.