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First Government Lawsuit Against a Patent Troll

Posted by samzenpus on from the when-the-man-comes-around dept.

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."

9 of 96 comments (clear)

  1. Meta Troll by locster · · Score: 4, Funny

    Sure, but I patented the process of suing patent trolls. Pay up.

  2. They took it seriously? by Anonymous Coward · · Score: 5, Interesting

    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.

    1. Re:They took it seriously? by FireFury03 · · Score: 4, Insightful

      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.

      And the fact that these scams keep happening demonstrates that there is money in it because some people fall for it. Same with spam. So the only way to stop these scammers is to actually litigate rather than just ignoring it, throwing it away and claiming it isn't a problem.

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      http://blog.nexusuk.org
    2. Re:They took it seriously? by Cenan · · Score: 4, Insightful

      And the fact that these scams keep happening demonstrates that there is money in it because some people fall for it

      And a really low barrier of entry into the market. All it takes is a carefully worded email and a public search on people to send it to, and you're good. You don't need to worry about court fees or anything, since you plan on dropping the case before any papers are filed.

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      ... whatever ...
    3. Re:They took it seriously? by alanbdee5808 · · Score: 5, Informative

      It happens far more common then most people think. I worked at a company where the Accountant was paying bills as they come in. It was only after she left and her replacement questioned it did we realize that we'd been paying a company like that for years.

    4. Re:They took it seriously? by FireFury03 · · Score: 4, Insightful

      Yet, litigating is expensive, and ignoring/throwing it away is cheap

      Which is why individuals can't be expected to do it - this is the government's job in the interest of protecting the law abiding public.

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      http://blog.nexusuk.org
  3. Re:Unintended consequences. by Sique · · Score: 5, Insightful

    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).

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    .sig: Sique *sigh*
  4. Re:Bravo Vermont by LynnwoodRooster · · Score: 4, Interesting

    Here's a question for you...

    I have a patent (well, several, actually). I used this patent to make product at my own factory, and sold the product for 6 years. Then I wanted to get out of the manufacturing business, and back to my true love - engineering. I now license that patent to many other companies, and have taken action against infringement of my patent.

    Given that I no longer actively market or produce a product with my patent, am I a patent troll? I did produce at one time, and other companies produce with my patent - but I, the sole patent holder, simply market and sell licenses to my patent. Am I a patent troll?

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    Browsing at +1 - no ACs, I ignore their posts. So refreshing!
  5. Re:Nah, just keep on sleeping while the wheels tur by Runaway1956 · · Score: 4, Informative

    "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