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More Bad News for 'Scanner' Patent Trolls

By William Peacock, Esq. on August 23, 2013 | Last updated on March 21, 2019

If tomorrow, you were to receive a letter in the mail that accused you of violating a patent by using your copy machine or scanner, and that letter demanded $1,500 per employee, you'd probably ignore it. After all, you are a seasoned attorney, and you probably know all about patent trolls.

Not all companies are as lucky as your company, however, and not all of them are so informed, especially when that letter comes with a draft of a lawsuit that the company, MPHJ, "plans" to file against you. A layperson might even hand over part or full payment to avoid litigation.

Shady practices like this have been on the rise over the last few years. When the patent "trolling" was isolated to a handful of demands, typically to tech companies, it was mostly overlooked, but now that companies like MPHJ have expanded their attacks on small businesses and consumers, they have attracted the attention of state attorneys general offices.

Back in May, MPHJ was sued by the State of Vermont under consumer protection laws.

This week, Minnesota came to a first-of-its-kind agreement with MPHJ that avoids the litigation, but heavily curbs the company's practices going forward, reports the Minnesota Star-Tribune. MPHJ will not be allowed to send out demand letters without getting approval from the state, and giving them sixty days' notice, and for any company that had paid MPHJ, the patent troll will pay a fine of $50,000 to the state.

That's glorious news for those of us who find patent trolling to be a troubling abuse of patent rights and the practice of law, and it really makes you wonder -- what did the State of Minnesota have on MPHJ? For the trolls to give up, agree to pay massive fines for any past violations, and to basically cease business in the state, the Minnesota Attorney General's office must have had some incredible leverage.

In any case, between the legal action in Vermont, and the agreement in Minnesota, it seems MPHJ's days are numbered.

One other note, for the cynics. MPHJ was born from the ashes of Project Paperless, another scanner patent trolling operation that came, saw, made demands, and shut down. They transferred their assets to MPHJ, which continued the practice. Minnesota's agreement specifically provides for such a reincarnation, requiring that any transfer of the patent rights at issue must be to a company that agrees to abide by the agreement.

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