Court Rules That Woman Wrongfully Placed On No Fly List Should Be Taken Off The List... We Think

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

Tue, Jan 14th 2014 4:12pm — Mike Masnick

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.

Gov Uscourts Txwd 669787 1 0 (PDF)Gov Uscourts Txwd 669787 1 0 (Text)

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

27 Comments

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Sunhawk (profile), 14 Jan 2014 @ 4:30pm

Well, I can always use more entertainment.

MPHJ, please... continue.
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- MrWilson, 14 Jan 2014 @ 5:46pm
  
  Re:
  Not just entertainment, but they'll hopefully fail so much in the case that a precedent is set that can be used against more patent trolls.
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- Annonimus, 14 Jan 2014 @ 9:06pm
  
  Re:
  what no popcorn? Dude its never too early for popcorn.
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Jeremy, 14 Jan 2014 @ 4:31pm

Citizens united
well it worked for citizens united so why not give it a try.
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- Anonymous Coward, 17 Jan 2014 @ 8:49am
  
  Re: Citizens united
  Just another reason Citizens United was a bad ruling and an even worse precedent.
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out_of_the_blue, 14 Jan 2014 @ 4:32pm

Well! Mike almost sorta derides any corporate "First Amendment Right"!
Of course, all changes when it's Google trying to get a court to let it publicize and unverifiable number of NSA requests on basis of its "First Amendment Right": last year that doubly phony premise got half a dozen puff pieces for Google right here on Techdirt.

Must be difficult for Mike to decide whether patent trolling over-rides pushing a mythical "First Amendment Right" for corporations.

But mainly this shows that the legal system still does kinda work: it's just that you kids aren't used to how SLOWLY the system works.

So many self-referring links here is good excuse to run out the original tagline #1:
Take a loopy tour of Techdirt.com! Old assertions prove new assertions!

12:32:33[n-025-6]
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- Anonymous Coward, 14 Jan 2014 @ 4:56pm
  
  Re: Well! Mike almost sorta derides any corporate "First Amendment Right"!
  You are aware that people work for corporations, right?
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  - Anonymous Coward, 14 Jan 2014 @ 5:03pm
    
    Re: Re: Well! Mike almost sorta derides any corporate "First Amendment Right"!
    Corporations are people too you insensitive clod!
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  - Anonymous Coward, 14 Jan 2014 @ 8:10pm
    
    Re: Re: Well! Mike almost sorta derides any corporate "First Amendment Right"!
    Of course he is. He works for the MPAA.
    
    Oh, wait, they're not a 'corporation', they're a noble collective of starving artists. Silly me, how could I forget?
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  - JEDIDIAH, 15 Jan 2014 @ 10:27am
    
    Re: Well! Mike almost sorta derides any corporate "First Amendment Right"!
    > You are aware that people work for corporations, right?
    
    Meaning that your corporate masters will be free to exploit your labor in order to corrupt the government. Meanwhile, if you dare speak up on any subjects of relevance you will be FIRED.
    
    Just look at everyone willing to throw that Duck Dufus under the bus.
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- MrWilson, 14 Jan 2014 @ 5:49pm
  
  Re: Well! Mike almost sorta derides any corporate "First Amendment Right"!
  "So many self-referring links here is good excuse to run out the original tagline #1:...Old assertions prove new assertions!"
  
  Woohoo! One more instance of OOTB not realizing the hypocrisy and irony in his own statements and I get a free car wash!
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- memphisslimsan, 14 Jan 2014 @ 8:20pm
  
  Re: Well! Mike almost sorta derides any corporate "First Amendment Right"!
  Are you male or female? Somebody here once claimed you were a female. I'm not so sure. I'm thinking male, mid 30s, low-level IT guy, single, ignored/reviled by females, especially at your workplace, and not many friends. Smart, but not college educated, thinks that InfoWars is a good source of knowledge... Trolling this site where no one respects your opinions at all is your futile life's work.
  [ link to this | view in chronology ]
  - art guerrilla (profile), 15 Jan 2014 @ 6:28am
    
    Re: Re: Well! Mike almost sorta derides any corporate "First Amendment Right"!
    *ouch*
    that was probably spot on, memphis...
    hee hee hee
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  - Anonymous Coward, 15 Jan 2014 @ 7:50am
    
    Re: Re: Well! Mike almost sorta derides any corporate "First Amendment Right"!
    It's actually this joker: http://en.wikipedia.org/wiki/Catherine_A._Fitzpatrick
    
    Not that many here believe it, but I've had enough run-ins with her to recognize the crazy when I see it.
    
    She's a failed content creator, pseudo-anarchist conspiracy theorist, and hater of Google and Mike. I think it's because she feels a need to go after anyone she feels has slighted her. Meanwhile, since her insane rantings have got her ZERO followers, she comes here to grift off Mike's blog. She's a sort of mascot, really.
    [ link to this | view in chronology ]
    - memphislimsan, 15 Jan 2014 @ 9:40am
      
      Re: Re: Re: Well! Mike almost sorta derides any corporate "First Amendment Right"!
      Well, interesting... Hello Cathy!
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    - MrWilson, 17 Jan 2014 @ 12:57pm
      
      Re: Re: Re: Well! Mike almost sorta derides any corporate "First Amendment Right"!
      I would guess that's not her. The writing patterns and word-spellings aren't consistent between the two. OOTB is actually less articulate than Catherine Fitzpatrick. OOTB hyphenates "over-ride," whereas Catherine spells it "override." She also doesn't seem to have the punctuation issues that OOTB has. It's entirely possible that there is more than one person who obsessively hates Mike and Techdirt and supports the absurd opinions that OOTB has espoused.
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- Anonymous Coward, 15 Jan 2014 @ 12:38am
  
  Re: Well! Mike almost sorta derides any corporate "First Amendment Right"!
  Punk ass bitch!
  
  Whew! I love rights!
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- out_of_the_orange, 15 Jan 2014 @ 9:27am
  
  Re: Well! Mike almost sorta derides any corporate "First Amendment Right"!
  Suing the @#$! out of people is not free speech, genius. Harrassment is also not protected.
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That One Guy (profile), 14 Jan 2014 @ 5:34pm

Someone correct me if I'm wrong, but I don't recall blackmail and extortion being 'protected speech' according to the first amendment, and yet they seem to be arguing just that... well, assuming the judge hasn't suffered recent brain damage, the ruling as they rip that argument to pieces should be entertaining at least.
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- Anonymous Coward, 15 Jan 2014 @ 5:43am
  
  Re:
  Indeed, that's why patent trolls, especially ones this extreme, should get jail time. It's blackmail and extortion which is illegal and has jail time as a possible sentence.
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Internet Zen Master (profile), 14 Jan 2014 @ 6:29pm

Did they just pull a Prenda?
Seriously, MPHJ claiming that their 1st Amendment rights are being violated by the FTC because they can't go patent trolling companies anymore is some Prenda-grade bullshittery right there.
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- Anonymous Coward, 14 Jan 2014 @ 11:23pm
  
  Re: Did they just pull a Prenda?
  Maybe they hired Carreon, Steele and Hansmeier LLP.
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Zem, 14 Jan 2014 @ 8:24pm

On a side issue.
This is an extreme example where a corporation has all the rights of a citizen, and demands those rights be preserved, and yet takes none of the responsibility of a citizen.

I do believe we need to re-examine what rights a corporation is given. As a citizen, if I break the law, I go to jail. As a corporation, if I break the law, I pay a fine. This is not an equitable outcome.
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- art guerrilla (profile), 15 Jan 2014 @ 6:30am
  
  Re: On a side issue.
  not only that, but pay a fine/pittance (*maybe*) AND TAKE A TAX WRITEOFF FOR IT, so that WE sheeple effectively end up paying the fine...
  (in more ways than one...)
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Anonymous Coward, 15 Jan 2014 @ 2:46am

Kinda surprised that Mike hasent covered their other bone headed move this month... http://arstechnica.com/tech-policy/2014/01/notorious-scan-to-email-patents-go-big-sue-coca-cola-and- dillards/

I hope that Coke doesn't just pay up a settlement out of court and fight this... but modern business practices have shown a distinct lack of a spine in recent years.
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- 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.
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  - JEDIDIAH, 15 Jan 2014 @ 10:32am
    
    Don't kill the host!
    ...except this whole situation came to a head precisely because the parasite in question broke the first rule of being a parasite. YOU DON'T KILL THE HOST.
    
    If they are asking as much from Coca-Cola as they were from the small fry then it's already cheaper for the victim to fight. That's why there was resistance from the smaller victims. The amount was so large that it was painful. It was painful enough to cause people to resist.
    
    Take a large corporation and $1000 a head is plenty for any legal battle including a patent fight.
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