The constant drum beat of bad news for patent trolls appears to be having an effect – one of the most notorious trolls is now backing off.
MPHS Technology Investments, LLC is the name of the troll that targeted mid-sized businesses throughout the country seeking a license of $1,000 per employee based for the use of a scanner/copier connected to an email system. In license demand letters they took many names – AccNum, AllLed, AdzPro, BriPol, CalNeb, ChaPac, FanPar, FasLan, GosNel, HunLos – but they delivered the same message, almost word for word. They described the patent, suggested that the target’s system “almost certainly” practices the patent, noted the “positive response” from other businesses to the licensing program, and invited negotiation of a license.
Virtually any business in the United States was a potential target of this scheme and life appeared to be good for MPHS. On May 22, 2013, however, the Attorney General of Vermont announced that it had sued MPHS for violating the state’s consumer protection laws by sending the license demand letters. The suit was filed on the same day that Vermont enacted a law banning bad faith assertions of patent infringement. At the same time, Ricoh, Xerox, and HP filed petitions to review MPHS’s patent at the Patent Office.
It is now clear that these actions are having an effect. In June, the MPHS entities started sending letters to their former targets letting them know of two significant and positive developments. First, Canon had entered into an agreement to secure a covenant not to sue on behalf of its customers. Second, the MPHS entities announced that would be standing down while the patent is under review at the Patent Office. Thus, the target could “consider the matter closed” unless and until they heard from the MPHS entity.
This is good news for troll defendants. The equipment manufacturers who should take on the primary burden of dealing with claimed infringement by use of their products stepped up to the plate and either attacked the patent or negotiated a settlement that took the customers out of the fight. And the threat of state consumer protection litigation has apparently caused the troll to publicly step back from its claims while the patents are under review. The recent public focus on abuses by patent trolls has already brought beneficial effects in at least one arena.