FTC tells 'scan to email' patent troll: Every breath you take, every lie you make, I'll be fining you The FTC has forced notorious patent troll MPHJ to pay $16,000 for every misleading shakedown letter it sends in future. Texas-based MPHJ, which owns a handful of patents, has been demanding money from 16,000 small businesses since 2012: it demands royalties of $1,000 per employee from companies that use networked scanners with …
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I am not sure about the exact legal subtleties here, but it seems to be a relatively common occurrence that trolls go after the customers instead, especially smaller ones.
Whether or not the troll could then be pointed back to sue the manufacturer is one thing, but the troll's gamble is that a small biz will instead fold and pay them a fee to avoid the possibility of going to court. I guess the troll can always opt to walk away if someone tries to fight them.
Excellent move by the judge here, too bad it can't become a blanket penalty to all trolls for frivolous threats of this specific nature. But maybe it'll serve to lower the barrier to similar troll penalties through case law.
It's still not the buyer/user of the equipment's fault. It's a built in function. I wonder how many companies fell for the "licensing" fee?
I'd like to see a ruling that patent trolls have to refund any fees plus interest... and maybe a penalty fee for being assholes.
....... but it's the law.
It may be the law but what idiotic Patent Office granted a Patent on a obvious process.
What prey is "innovative" in taking a picture of a document and adding an address to it and dropping it in the Interweb ether for delivery. It's just an electronic mailing machine.
Not exactly
"cannot threaten legal action against a business unless it has sufficient evidence to pursue a patent infringement case."
Point is, they know they have no case to begin with but they are _pretending_ to anyway. That's what the 16k is about.
Whether or not a patent is valid is one thing and many of them are silly. But there is some logic to making patent users liable under _some_ conditions. Think stolen goods & "your Honor I knew that $50 for a Galaxy S5 in a back alley was dodgy but I am not a thief".
Problem is that trolls like this then abuse not only the patent system but then go after innocent bystanders chosen for their likely low defence capacity _and_ lack of vested interest, due precisely because they are bystanders. Seriously these guys make regular patent trolls look like Mother Theresa.
Patenting covers use as well as manufacture, so customers can be liable. You may think that's stupid, but it's the law.
So a few years ago when the guy who invented intermittent windshield wipers sued, I believe it was Ford, he could have sued everyone who ever bought a car with them? Frankly, I'm skeptical. How is the user to know if the manufacturer is infringing? If this IS true, there's never a reason then for a manufacturer to license a patent. Just build the device and let the patent owner sue the buyers.
So a few years ago when the guy who invented intermittent windshield wipers sued, I believe it was Ford, he could have sued everyone who ever bought a car with them?
Yes he could. For whatever reason this is usually not the common practice outside the IT industry so he did not. Only in the IT industry it is customary to go after the customers.
We were one of their targets. Got multiple letters threatening a suit. Sent it all to our attorneys who basically told the trolls to fuck off, and if they came back again we would take action. Never heard from them again.
Nice to see the FTC finally acting, but I do wish they had given recourse to firms like ours who already spent money making these guys go away. 16K sounds about right.
It seems a shame that the worst they could get them on is lying about what others have paid and pursuing the litigation (lying in their letters). There doesn't seem to be any recourse for the authorities to actual declare this as an extortion racket - which is exactly what it seems to be.
In some ways it almost legitimises this practice as long as they don't "lie". A $5000 machine can attract a post-purchase licence fee of $500,0000? Madness.
A manufacturer who owns a patent could sell their patent to a (connected) third party and sell loads of their devices while the third party then goes after those same customers for three times the amount in licence fees.
There's always some jerk who will try this sort of thing.
When I worked for the UK manufacturers of a famous diecast model car range we received letters from an (inevitably American) lawyer who claimed to have signed up for copyright many manufacturers of real cars on whose products our toys were based.
The company wavered on whether to negotiate to avoid the possibility of litigation. On further investigation we found that few major car firms had actually signed up.
Most had originally cooperated with us, often supplying blueprints to ensure accuracy. They remained content with the notion that putting replicas of their products into the hands of young boys might produce sales of that brand's real cars in later life.
You get some of the same carry-ons with CGI models, though the recent cases I have heard of have involved trademarks rather than copyright. One of the quirks of US law is that government documents are not copyrightable (I maybe over-simplify) and so are in the public domain. This doesn't stop tradenark law, and the current MARPAT camouflage includes the trademarked USMC emblem in the pattern.
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