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back to article Top patent troll sues US regulators for interfering with its business

MPHJ Technology, one of the most notorious patent trolls in America, has filed a lawsuit against the US Federal Trade Commission, claiming that the agency's attempts to interfere with its business are in violation of its constitutional rights. The obscurely named MPHJ is a patent-assertion entity (that's troll to you and me) …

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Go after them personally

When does behavior become so far out of line that the individuals must be called to account? I think this is pretty close if it is not there.

Get the names of the actual individuals pressing these bogus claims and press for judgments against them personally both for financial penalties and criminal sanctions.

We make it a no-risk proposition for these people to pursue these odious practices. Add a little fair risk and see how enthusiastic they are.

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Re: Go after them personally

.....and disbar (or whatever the US equivalent is) any lawyers involved in this scam.

Silly me, as if! Where's my net, I need to go after all that flying bacon...

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Terminator

Re: Go after them personally

I absolutely understand your sentiment but without the rules and protections many legitimate businesses would not start up and could not survive.

Protections for the individual were brought in for a reason, therefore removing them carries wider implications.

We should seek ways to kill the Patent Trolls without removing the legitimate protections (to me its ironic that Texas is the home of so many trolls and so many handguns, but that's an entirely different solution to the problem and I wouldn't care to suggest it was actually a good idea otherwise I'd be sued for something somewhere, ironically probably Texas)

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Go

Re: Go after them personally @ Velv

Actually I have to disagree with you. Companies are given equal or greater rights than individuals in many cases. If a person was sending out these emails demanding money illegally, that person would be held to account and would more then likely go to prison for Fraud. Just because its a company doing the fraudulent activity, they should get away with it, with just a slap on the wrist?

It's time to start holding the company CEO's/principals to account for the actions of the company. If the CEO was at risk of going to prison for the fraudulent actions of the company, then those activities would stop immediately.

This isnt actually a new idea. In the Aerospace industry, if you produce a defective part or repair for an aircraft, and it fails and people are killed, the person who did the work, and the people who approved the work/design/etc, do go to jail for Manslaughter (just ask the guys whose repair of the aircraft in front of the Concorde in Paris caused it to crash). So making Patent Trolling company employees liable for the fraudulent actions they perform for the company would be a just process in my opinion.

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Re: Go after them personally @ Velv

If a company is found to be acting in a criminal manner, courts have ruled on several occasions that constitutes grounds to pierce the corporate veil and go after the entities behind it.

The hard part is getting the court to do it.

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Mushroom

Re: Go after them personally

It looks like we have the Patent Troll version of Prenda Law; an outstanding law firm held in high esteem by several Federal judges.

Agreed! prosecute persecute the offenders.

Bankrupt their m----- f------ asses.

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Firat amendment won't help them

"FTC can't stop MPHJ from sending letters claiming patent rights, because such letters are protected under its First Amendment right to free speech."

First Amendment does not protect you from charges of mail fraud, blackmail or extortion.

You can be pretty sure that when anyone pulls out the First as their defence, they are skating on very thin ice.

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Re: when anyone pulls out the First as their defence,

Maybe in the UK (although I doubt that), but in the US you'd better be prepared to receive a massive body check.

Regrettably, the patent troll is correct on this one. The First amendment along with the 5th protect you from having the government preemptively stopping your speech. The government has to file the charges and then the case has to be proven. Where it gets worse is that they will also be asserting they have the right to petition the courts for redress, which they do. And that part of the process the courts have outlined for bringing petition is that you have to have first made a good faith effort to resolve the dispute without involving the courts. Until it can be proven (in court) that the letters were not sent in good faith the court is obliged to assume they were.

You and I can look at the totality of what MPHJ have done and rationally deduce they are patent trolls. The presumption of innocence does not permit the same latitude to the courts.

Now where things do get dicey for them, is that after the government proves in court that the letters were not sent in good faith, a whole raft of entirely justified penalties can be invoked. They include piercing the corporate veil so that individuals of the corporation as well as stockholders in the corporation can be held personally liable for the damages. Furthermore the courts can (although they usually don't) assign ALL the costs of the litigation (including plaintiffs attorneys fees and all salaries and benefits incurred by the state for all of the employees of the court) to a vexatious litigant. And then you finish it off with a disbarment.

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Venue

I sometimes get the impression that most of the patent trolling abuses could be prevented by banning Texas courts from hearing patent cases.

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Re: Venue

Why all the downvotes? I agree its bullcrap but that is what is going on and why its always East Texas you see.

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Re: Venue

The downvotes are because you are wrong. People choose East Texas because it contains a bunch of highly pro-business hicks. These people are easily bamboozled by the patent lawyers and there is an entire industry built up around understanding the local cultural moores to better appeal to them and get them to "vote" your way.

East Texas is chosen because of the "quality" of it's jury pool. Nothing more.

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Re: Venue

Oh kk. But also because of the quality of jury pool the courts have been setup as well to mostly handle patent cases. As you imply the entire industry has built up around it including in the judiciary. FYI the heart and soul of the KKK is now largely found in East Texas which also backs up your point.

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Re: Venue

The court evolution to process patents faster came after the patent cases moved there en masse. It really started with the jury pool. From there, screwing the average guy became a big money industry.

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Rol
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Isn't there some Darwinian Tactical Assault and Battery Team on hand to sort out these genetic flaws?

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And in related news

http://arstechnica.com/tech-policy/2014/01/supreme-court-looks-to-rein-in-top-patent-court-with-two-new-cases/

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Free Speech?

Only gets you so far until it becomes harassment. The FTC can always publish a free to use reply letter online for people who get the letters from MPHJ. It can read something like;

"We have read your allegations, and regret to inform you that any dealings in regards to scanning will be conducted between ourselves and "Supplier XYZ" If you feel "SupplierXYZ" has infringed upon your patents, please take the matter up with them, as we purchased Product ABC from them in good faith, and cannot accept any responsibility for a third party infringing upon your IP. Any further attempts to coerce any form of payment from us will be met with legal response, for attempted extortion, fraud, and harassment."

Let the trolls try and take on the likes of Xerox, Konika Minolta, HP, Canon etc. After all, they were the initial infringers.

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Re: Free Speech?

Sorry, no dice. The courts have ruled that the manufacturers aren't even allowed to intervene even when they want to. It's the use of the (allegedly) infringing technology that makes you a target.

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Re: Free Speech?

The reply is simple:

See Arkell v. Pressdram (1971).

Perhaps better, ignore it entirely.

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Re: Free Speech?

It may be free to use, but it will also get you a default judgement in court against you for no show.

In fact the easiest way to deal with patent trolls which will exterminate them once and for all is to exempt the patent law cases from the default no-show clause. If you are suing someone for infringing and he does not show you still have to defend your case and _ONLY_ if you win you get the fees and damages assigned to you by default.

This will terminate 99% of trolling outright.

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Not in this case

If I understand correctly, this company is in the business of sending out letters that say "Send us money or we will sue you".

They haven't filed a case at that point and probably don't intend to.

Outright extortion really.

If they have actually filed the cases then they'd be risking actually having to defend it in court, not to mention frivolous lawsuit rulings as it would only take one company director to have a lawyer friend take it on "pro bono".

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Anonymous Coward

For me, it's that the Town's name is Waco that's really the final nail in the coffin of the argument. Even as invalid and obviously desperate the arguments they make are, trying to get a trial in a town with that kind of a name just as a flare for the stupid.

Oh look what kind of images you get from typing the city's name in the image section of a popular search engine. Says it all really ...

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leave Waco

At least Waco hasn't had refinery or had an unlicensed fertilizer plant blow up in its city limits lately like some other cities in Texas.

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Re: leave Waco

Just crazy cultists armed to the hilt with assault weapons and boxes of matches......

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Anonymous Coward

Waco

An infamous town in Texas where one of the biggest domestic fuckups of recent American history (the other maybe being the Columbine shooting) took place. In somewhat short form, cultists armed with shotguns and various gunshack-bought weaponry had barricaded themselves with hostages in a house, a bunch of SWAT, ATF and FBI agents got frantic with their automatic rifles and were killed while trying to free the innocents inside, a tank broke down while stuck halfway into the house, a few hours later and over a couple CS tear gas canisters shot in small spaces with no ventilation, the house burns down with everyone (the crazies, innocents, a few more agents pinned down) in it under the eyes of outside viewers, cops and soldiers; WTF happened?! (Urban dictionary)

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If you would bother to get past your preconceived notions based merely on a four-letter name, you would find that Waco is actually a very nice city that's home to some very nice folks. As home to Baylor University the population tends towards a religious conservatism that would make some Reg readers cringe, but it's actually not as straight-laced as it's reputation.

I tend to think that the choice of venue is a poor one for the plaintiffs. I really don't think the folks in Waco will be receptive to this type of B.S.

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Preconceptions

I don't doubt that "Waco is actually a very nice city that's home to some very nice folks". The same might be said for Tulia and even parts of Preston Hollow -though I can't imagine many dark skinned people living there feel the same way.

However:

"Public outcry over Ruby Ridge and the subsequent Waco siege involving many of the same agencies and even the same personnel fueled the widening of the militia movement."

http://en.wikipedia.org/wiki/Ruby_Ridge

Just like in the movies, the bad guys get around a lot.

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re: re: leave Waco

Hey, Thorne - I resemble that remark! Seriously, a semi-automatic is not an assault weapon, while a full-auto might be - and - what do you have against boxes of matches? It's nigh well impossible to purchase a single box, as most are sold in bulk packages in food stores.

BTW, "Waco" is pronounced WAYKO, not WHACKO, although Koresh & company WERE whackos. I confess to mispronouncing it (for comic effect) during the siege.

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Re: re: re: leave Waco

Is Waco short for "We ain't coming out"?

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Re: re: re: leave Waco

Actually, a semi-automatic rifle _IS_ an assault weapon as far as almost every armed forces in the world is concerned.

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Re: re: re: leave Waco

And a steak knife is a bayonet, too....

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Go ahead and try to sue the federal gov and states. See who has more money.

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"See who has more money."

Me for one. My kids too, and most poor people living in India/Africa.

Pretty much anyone has more money than the federal govt, since they have

NEGATIVE 17 trillion odd, and counting.

http://www.usdebtclock.org/

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Pirate

MPHJ

That's a funny way to spell Apple/Microsoft.

Hmm. Learn something new every day.

(don't get me wrong. these guys can go rot as well)

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Re: MPHJ

I don't think that this company has much to do with Apple or Microsoft. They are IMHO probably the newish owners of the Kodak Scanning Patents. Kodak produced networked scanners that could send scanned documents to a variety of destinations as long ago as the early 1990's. I suspect that Kodak had a fire sale of patents and this lot bought them up.

Neither Apple nor MS has a history of working in this thechnology area.

But hey, I could be wrong.

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Re: MPHJ

Well Steven, I may have laid the subtly on too thick. (see what did there?)

I was implying that those 2 companies and most other large corporations are the largest patent trolls of all.

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Paris Hilton

Re: MPHJ

Hear that *whoshing* sound? If you look up, you just might see what caused it.

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Not selling anything? Huh?

They're saying companies have to pay $1000 per employee if they have a scan to email system. That constitutes a license and therefore the company is selling a service to the people they are threatening.

They're going to lose on that count...

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Facepalm

Re: Not selling anything? Huh?

What I want to know is how the hell did they get that patent awarded? scan to email, surely that is obvious? if scanner not connected to PC, what is best way to send scanned documents to yourself?

Clearly the obvious answer is email...

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Scan to email?

You can patent this ?

Really?

Wow

I wrote a scan to email function as part of a demo tool for a document handling package 20years ago.

Seems you really can patent anything.

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Anonymous Coward

Re: Scan to email?

Its the USPTO,

You could probably patent any male bovine excrement you wanted.

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Re: patent any male bovine excrement you wanted.

Yes, but it must first be properly polished and it helps tremendously if it is presented by a duly authorized attorney. And it must not look exactly like any other previously polished MBE which has been accepted.

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durisdiction?

well I guess their excuse that its out of the FTC's jurisdiction is true. Why don't they just send the police round for blatant mass scale fraud?

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Flame

So their scam is "protected" by Free Speech ?

Well I've got some Free Speech for MPHJ : Fuck You.

That will be all.

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Anonymous Coward

We got one of their demand letters...

And by chance we happened not to be using the "scan to email" functionality they claimed was infringing so it was easy for our attorneys to tell them to fuck off or sue.

I spent some time looking over the patents they claim cause infringement - they're really something to behold. A complete mess, with totally unrelated claims, lots of superfluous language that's nearly impossible to decipher, and you end up wondering how a patent could ever have been issued in the first place - especially when there's prior art for the scan-to-email functionality they claim is theirs.

It's just pure blackmail, plain and simple, with carefully chosen targets that don't threaten to expose their scam and pay them to go away. NY has it right - not only make them stop, make them return the extortion (should be triple if you ask me). Or just do it the NY way - break their kneecaps.

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Re: We got one of their demand letters...

I would agree, but do wonder: did your scanners have a button which scanned and automatically instructed Win XP's default email program (over USB!) to email a copy? Mine does. I've never used it in anger, but I pressed it once by accident. Does the mere existence of such a button render the owner liable?

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Re: We got one of their demand letters...

No it doesn't.

Because the owner is not liable. Only the manufacturer or importer could be liable for patent infringement.

So unless you bought it direct from Ghangzou province or whatever, it's not you.

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Hot damn...

America needs to ammend its constitution and bring it into the 21st century instead of beating around the same bush and holding itself back

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Facepalm

NewEgg defense

The only way to stop these extortionists is to take them to court.

I, too, have read their patents. They're reaching. They'll be laughed out of court.

Any computer will scan to email with a simple script. The reason it was not done in 1980s was not due to technical inability, it was due solely to the lack of processor and/or communications channel speed.

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First Amendment? As if.

This isn't a free speech issue. Their first amendment claim is part of a shotgun approach, where they're just throwing a bunch of legal arguments against the wall to see what sticks. (OK, sorry, mixing my metaphors.) Freedom of speech doesn't mean you can say anything you want to anybody you want at any time you want with zero consequences, and it's not blanket permission to do whatever you want.

And, ignoring the validity of the patent claim for the moment, this isn't actually a patent issue. Manufacturing and selling a product that infringes on somebody else's patent is a patent violation. Using such a product is not. The end users are not liable for the patent violation. The fact that MPHJ is bypassing the manufacturer and suing the end users is a pretty clear sign that they're just a bully threatening to beat up kids for their lunch money.

Of course, the fact that they're a non-practicing entity with nothing but a large patent portfolio and making all their money by suing the crap out of anybody they can was a pretty big clue, too.

East Texas, whatever other flaws or virtues it may have, is a typical venue for such suits because they have a track record of favoring the trolls.

MHO. IANAL. YMMV.

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