Scanner Patent Troll Update: Titans Finally Enter the Battle

by Bradley Arant Boult Cummings LLP

If you are like thousands of small American businesses, you might have received a dubious “cease and desist” letter during recent months from an LLC with an odd name. The LLC’s name has six letters, the first and fourth of which are capitalized, and is a two-syllable nonsense word. The letter states that your company is infringing at least one of U.S. Patents 7986426, 7477410, 6771381, and 6185590, because you own and use a scanner to send scanned files via e-mail. It goes on to say that a blanket license is available for the scanner patents for about $1,000 per employee and that the business community in your area has been eagerly snapping up licenses. In many cases, a menacing-looking mock judicial complaint is attached to the letter, a clear threat of an impending lawsuit if the recipient fails to pay for the license.

If you have not received such a “threat letter” yet, you soon may. During the past two years, a company called Project Paperless, LLC has sent thousands of such letters, almost exclusively to small business and non-profit organizations. All of the letters are sent in the name of one of forty nonsense-named shell companies, but not by Project Paperless itself. The intent of the letter is clear: scare small organizations into paying for the “license” to avoid a costly lawsuit.

The conduct of Project Paperless has gained notoriety as probably the most egregious “patent troll” in memory. The scanner patents are of questionable quality, and the letters appear to be sent without any real knowledge of whether the addressee is actually infringing any of the patents (at least one company we are familiar with received the letter, but does not own a scanner). Moreover, Project Paperless has sued only one company of the thousands that have received these threat letters and appears to select the target companies universally on the basis of the recipient companies being too small to afford a costly patent infringement trial. Project Paperless’ strategy has brought disrepute to the patent system and has amplified calls to curtail the rights of patent owners, generally.

Recent Developments

However, things do not appear to be going well for Project Paperless: the system is fighting back.

Late last year Project Paperless gave up on its efforts and apparently sold or transferred its patents to a Delaware company, MPHJ Technology Investments, LLC (“MPHJ”). The man behind MPHJ seems to be a lawyer in Waco, Texas, named Jay Mac Rust. MPHJ is continuing the strategies used by Project Paperless, including the use of the same forty nonsense-named shell companies as fronts for its litigation threats.

The patent system which MPHJ and Project Paperless have cited as supporting their patent infringement claims is now being used to challenge their patents. Three major scanner manufacturers, Hewlett-Packard, Ricoh, and Xerox, have filed requests that the U.S. Patent and Trademark Office (“Patent Office”) review the validity of two of the patents (U.S. Patents 7986426 and 6771381). The review process, which is known as an “inter partes review,” is one of the reforms created when the America Invents Act was passed in 2011 and makes it easier for the public to challenge questionable patents. Hewlett-Packard, Ricoh, and Xerox have submitted copious evidence to the Patent Office that systems for scanning and e-mailing documents were known well before the scanner patents were filed. Although it is early in the “inter partes review” process, the prospects for MPHJ’s newly acquired patents surviving do not appear good.

To compound MPHJ’s problems, it is being sued by the State of Vermont over its obnoxious threats to Vermont businesses. In late May, the Vermont Attorney General’s Office filed a lawsuit accusing MPHJ of violating the Vermont Consumer Protection Act. Vermont alleges that MPHJ’s threat letters are full of untrue and misleading statements that constitute unfair and deceptive trade practices. The long list of false statements in the threat letters cited in the lawsuit includes: that MPHJ has knowledge that the recipient is infringing the patents when MPHJ has actually performed no investigation whatsoever; that requests for royalties have been well received by the business community when in fact most recipients just ignore the letters; that MPHJ will enforce its rights in court when in fact only one company out of thousands has ever been sued (and the case promptly settled out of court); and that the shell companies have the right to enforce the patents as exclusive licensees when they do not have that right. The lawsuit seeks to shut down MPHJ’s activities in Vermont and seeks money damages, including $10,000 per threat letter.

Lastly, at least one targeted business decided to fight back and has filed a preemptive lawsuit against one of the nonsense-named shell companies. As mentioned in our earlier report on the scanner troll phenomenon, Engineering & Inspection Services, LLC (located in Louisiana) reacted to its threat letter by suing the shell company for violating antitrust laws and seeking a court order that the scanner patents are invalid. The lawsuit was filed in April of this year, and the court has yet to issue any decision on the record (and most likely will not do so for at least several months). Often when such a preemptive lawsuit is filed (known as a declaratory judgment action), additional parties who have been threatened by a patent holder will join the litigation to pool resources against the common foe. At this time we are not aware of any additional parties joining the Engineering & Inspection Services, LLC, law suit.

Stay Tuned

We will continue to monitor this rapidly evolving situation and to provide up-date reports. The change in ownership of the patents and the challenges to their validity by private industry and government alike have increased the likelihood that some or all of the patents will be found to be invalid. Any decision by the Patent Office or one of the courts involved will be reported.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Bradley Arant Boult Cummings LLP | Attorney Advertising

Written by:

Bradley Arant Boult Cummings LLP

Bradley Arant Boult Cummings LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.