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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.
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.
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
Generally the goverment doesn't decide who is and who isn't a troll. The Attorney General can only sue based on current law, and the judge getting the case can only decide based on current law. "Patent Troll" is not a legal term, and MPHJ doesn't get sued for being a patent troll, but for fraudulently representing what they are selling (licenses to patents they claim to have exclusive rights on, which they don't have, for instance).
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.)
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!"
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 you look at Prendalaw, it more suggest that the lawyer thought he could get away with it. They often can. Sometimes they can't.
Even more so, don't let them directly sue consumers.
If I can walk into Wal Mart and buy a product, and you think that product infringes on your patent, you can sue the company who made it, but the consumer can't be sued.
This is a case of people being sued for using scanners -- technology we've had ready consumer access to for quite a long time.
Consumers should be indemnified from such things -- they didn't infringe on your patent, they probably have no idea what you're talking about. By the time you can walk into a retail store and buy a product it should be too damned late to sue consumers.
This is just shaking down people who are using stuff that has been readily available since the 90s, and which you can buy damned near anywhere -- what's a scanner cost these days? An all in one printer is what, $50?
If they haven't been filing patent lawsuits by now, they've essentially given up any rights to be suing anybody, let alone end users of technology which an be picked up pretty much anywhere.
Lost at C:>. Found at C.
Generally the goverment doesn't decide who is and who isn't a troll. The Attorney General can only sue based on current law, and the judge getting the case can only decide based on current law. "Patent Troll" is not a legal term, and MPHJ doesn't get sued for being a patent troll, but for fraudulently representing what they are selling (licenses to patents they claim to have exclusive rights on, which they don't have, for instance).
According to the article, they are in trouble because they threatened to sue people for patent infringement, when they had (1) not checked whatsoever if patent infringement had been committed, and when (2) they had no intent whatsoever to take anyone to court but only were interested in settlement payments.
They would have been fine if they actually had checked that there was at least a likelihood for patent infringement, and if they then had taken people to court.
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.
"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
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, you mean the same feds who granted these patents in the first place?
Common mistake. There are no "same feds". The "feds" are people from all walks of life, and come with opinions that vary as much as the general population. The people who granted these patents will most certainly not be the same people who would file suit, and probably have never even heard of each other. Like most other stereotypes, this one is just wrong.
Just another day in Paradise
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
It went to every post just in case.
rewriting history since 2109
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.