Patent Troll Sues The FTC, Saying It Has A First Amendment Right To Shake Down Companies Using A Scanner

from the good-luck-with-that dept

We've written a few times about patent troll MPHJ, a company which had a bunch of bizarrely named shell companies sending threatening letters to thousands of small businesses, demanding $1,000 per employee, if those companies happened to have a network connected scanner that had the common "scan to email" feature. MPHJ claimed it had a patent that covered this, and wanted to go after the end users with threats, in order to clean up on "settlements." MPHJ had become one of the poster children for extreme patent trolls abusing the system, and various states had begun suing the company for threatening local businesses. In fact, just today, NY apparently settled with MPHJ -- and revealed that MPHJ acquired its five patents for... $1.

When the FTC began investigating patent trolls, apparently MPHJ was near the top of its list, to the point that it was preparing to file a lawsuit against the company. MPHJ took the rather aggressive route of suing the FTC and its five commissioners directly.

MPHJ claims that the FTC's action "violate MPHJ's constitutional rights." It claims that the FTC has "no authority to regulate or interfere with the patent enforcement activity at issue..." This seems to ignore a Supreme Court ruling from just a few months ago that showed that the FTC does, in fact, have a mandate over patent enforcement issues, when that enforcement goes into areas that the FTC regulates, such as antitrust violations or unfair or deceptive commerce practices -- basically the core stuff the FTC regulates.

On top of this, MPHJ argues that it has a first amendment right to shake down companies for money. It's going to have a very difficult time supporting that argument. It seems unlikely that MPHJ's case will get very far. However, the FTC's suit against MPHJ may spell a world of trouble not just for it, but for other patent trolls, who may want to take notice.
Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: first amendment, ftc, patent trolling, patent trolls, patents
Companies: mphj


Reader Comments

Subscribe: RSS

View by: Thread


  1. icon
    That One Guy (profile), 15 Jan 2014 @ 2:56am

    Re:

    Sadly, for the larger companies(and the smaller companies their spineless payouts allow to be shaken down), most of them see it as more 'cost effective' to just pay out to the parasites, not realizing it does nothing more than put up a huge freakin' 'FREE MONEY HERE!' sign to all other parasites, who will shortly be crawling out of the woodwork to get 'their' cut.

Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Follow Techdirt
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat

Warning: include(/home/beta6/deploy/itasca_20201215-3691-c395/includes/right_column/rc_promo_discord_chat.inc): failed to open stream: No such file or directory in /home/beta6/deploy/itasca_20201215-3691-c395/includes/right_column/rc_module_promo.inc on line 8

Warning: include(): Failed opening '/home/beta6/deploy/itasca_20201215-3691-c395/includes/right_column/rc_promo_discord_chat.inc' for inclusion (include_path='.:/usr/share/pear:/home/beta6/deploy/itasca_20201215-3691-c395:/home/beta6/deploy/itasca_20201215-3691-c395/..') in /home/beta6/deploy/itasca_20201215-3691-c395/includes/right_column/rc_module_promo.inc on line 8
Recent Stories
.

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it
Close

Email This

This feature is only available to registered users. Register or sign in to use it.