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Patents The Courts

Notorious Patent Troll Sues Federal Trade Commission 102

Fnord666 writes with news that the notorious scanner patent troll MPHJ Technology caught the eye of the FTC, and decided to file a preemptive lawsuit (PDF) against the Federal government. From the article: As the debate over so-called "patent trolls" has flared up in Congress, MPHJ became the go-to example for politicians and attorneys general trying to show that patent abuse has spun out of control. ... The FTC was going to sue under Section 5 of the FTC Act, which bars deceptive trade practices. MPHJ says that the FTC is greatly overstepping its bounds. The patent-licensing behavior doesn't even amount to 'commerce' by the standards of the FTC Act, because the letters are not 'the offer of a good or sale for service,' argues MPHJ. Furthermore, MPHJ has a First Amendment right to notify companies that it believes its patents are being infringed."
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Notorious Patent Troll Sues Federal Trade Commission

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  • Yeah right (Score:5, Interesting)

    by gstoddart ( 321705 ) on Wednesday January 15, 2014 @10:39AM (#45964851) Homepage

    The patent-licensing behavior doesn't even amount to 'commerce' by the standards of the FTC Act, because the letters are not 'the offer of a good or sale for service,'

    No, they're an offer for them to pay them money to license your patent, which may or may not even apply or hold up under scrutiny.

    If your business model is holding onto patents and getting people to license them, guess what? That's commerce guys.

    I sincerely hope these guys get some form of smackdown, or charged under the RICO act or something.

  • Re:No (Score:5, Interesting)

    by Anonymous Coward on Wednesday January 15, 2014 @11:05AM (#45965123)

    I have to agree, I hope this turns out well.

    Will it, though? If they end up taking that point all the way to the Supreme Court, what will the opposing arguments be?

    On the one hand you'd have the FTC probably arguing that these corporations exist only to prey on the market, that they use and/or abuse a system through which they purport to profit by, essentially, extorting compliance fees, all the while without ever actually creating or selling a product, which is to say, without ever actually *adding* to the system (outside of eventual taxable revenue and personal income).

    But on the other you'd have a company arguing that they have a right to *notify* a "competitor" when they believe their commercial rights have been violated -- and, strictly speaking, don't they? More importantly, *shouldn't* they? The larger issue is the system itself -- this is truly a "don't have the player, hate the game" situation. I hate patent trolls and any such equivalent entities with passion and wish they'd die a fiery death, but if there are any situations where a company has a legitimate gripe with another company "stealing" their products, then the right to send them a "cease and desist/pay us what you owe" letter should exist, right?

    So unless this results in serious reform, which I doubt (and whatever the courts' jurisdictions and power may allow them to do, I doubt even the Justices of the SCotUS would go so far/dare to throw the whole thing away), it'll be a lose-lose situation. We either get a ruling that makes it a lot harder for patent trolls to exist (while also making legitimate infringement harder to fight) or an affirmation of essential rights that would validate patent trolling.

  • Re:Yeah right (Score:5, Interesting)

    by gstoddart ( 321705 ) on Wednesday January 15, 2014 @11:12AM (#45965181) Homepage

    And, as a follow on to that, scan to email has been available in printers for at least 10 years now.

    The time to defend that patent was a long time ago.

    I'm of the opinion that by the time I can buy something in Staples, the patent situation isn't my problem. I bought a commercial product in good faith, and don't know or care about the myriad of patents involved.

    If you think the vendor of said product is infringing your patent, take it up with them. This 'go directly to users of the technology with a shakedown letter and a threat of a lawsuit' should bring criminal charges.

  • Re:First Ammendment? (Score:4, Interesting)

    by bluefoxlucid ( 723572 ) on Wednesday January 15, 2014 @12:01PM (#45965745) Homepage Journal

    The "First Amendment" is the go-to for anything that involves communication in the US. I have a first-amendment right to show a 9 year old girl my penis--I mean it's just "expression" right? That's the kind of argument being made here: they're free to "express" that their patent is being infringed.

    The problem with that argument is of course the same problem with my extreme example: you can express whatever the hell you want--as above, I expressed the concept of showing my wang to a schoolgirl--but you can't take other actions. You can express that your patent is being infringed; but you can't take legal action if you don't meet the enforceability standards set out by the FTC within their power as granted by the law. That is: if the FTC decides you can't enforce your patent under those conditions, then you can tell people that Company X is using your patented work, you can even claim they're "Violating" it and that the US has all these hair-brained laws about how you can't do anything about it even though it's your god damned right to enforce it.

    What you can't do is slam a legal document on their desk and make them expend resources having their lawyers analyze your claim--since the claim is false, you're harassing them and owe them damages. Continued lawsuits could get you barred from the court systems. "First Amendment Rights" don't go this far, just like they don't go so far as explaining pederasty by physical example.

  • Re:No (Score:4, Interesting)

    by hawkinspeter ( 831501 ) on Wednesday January 15, 2014 @12:24PM (#45966021)
    I don't see how that would work out. If a garden shed based inventor comes up with a novel, useful nuclear reactor design and patents it, your law would ensure that he'd have to go into the energy business.

    The real answer is to not allow patents for things that are "obvious" to people knowledgeable in the relevant field. These obvious patents don't help anyone because almost no-one searches through patents to find out how to do things.

The wages of sin are high but you get your money's worth.