Vermont's Case Against Notorious Scanner Patent Troll Moves Forward

from the fighting-back dept

Last year, there were a few stories concerning a really despicable (more than usual) patent troll called MPHJ Holdings. Joe Mullin, over at Ars Technica, had dug deep into the details, finding a bunch of shell companies all sending demand letters to various small companies demanding around $1,000 per employee for using a network-connected scanner that includes a "scan to email" feature (i.e., pretty much any scanner on the market today). There were all sorts of sketchy things about MPHJ, and it was pretty clear that it and all its shell companies were effectively shaking down small businesses. It was so egregious that Vermont's Attorney General sued the company, claiming that it was engaged in "unfair and deceptive acts" with its threat letters.

Over the last year, MPHJ has fought hard to get the case out of a Vermont state court and into a federal court, arguing that it was a patent case (which is covered by federal law). The federal district court sent it back to the Vermont state court, saying that it's not really a patent case at all, but about the company's threat letters. Specifically, it stated:

"the State is targeting bad faith conduct irrespective of whether the letter recipients were patent infringers."

MPHJ appealed this ruling to CAFC, the appeals court that handles all patent cases (and is somewhat notorious for constantly expanding patent law through its decisions). Last week, however, CAFC rejected MPHJ's appeal, without even getting into the issue of whether or not this is a patent case. Instead, it simply noted that the law says appeals courts can't review orders remanding a case to a state court. Case closed, no jurisdiction. Pack your bags for Vermont, MPHJ lawyers.

Of course, the more important case involving MPHJ is the one in which it brazenly decided to sue the FTC for investigating its actions. The decision on that case could come at any time. You never can tell how a court will rule, but the odds are not likely to be in MPHJ's favor on that one either...

Filed Under: cafc, deceptive practices, extortion, patent troll, scanner patent, vermont
Companies: mphj