Vermont Loses Round with MPHJ Technology


Law360 reports that the Vermont Attorney General will drop a request for a court injunction that would bar “patent troll” MPHJ Technology Investments  from threatening to sue businesses in the state, after a judge said the request may be preempted by federal patent law.

Vermont Attorney General Bill Sorrell moved to amend the complaint in a suit he filed in May 2013 alleging that MPHJ violated state consumer-protection laws by accusing small businesses of infringing upon document-scanning patents. Typically, MPHJ law firms send out demand letters to small businesses demanding approximately $1,000 per employee for using their MFPs’ scanning capability.

Law360 reports that notorious patent-enforcement firm MPHJ Technology has struck back against Vermont’s attorney general, petitioning a court on February 14th to impose sanctions on the state of Vermont, calling that state’s lawsuit “a textbook case of sham litigation.”

In May 2013, the Vermont attorney general alleged in lawsuit that MPHJ engaged in deceptive practices by accusing small Vermont businesses of infringing upon MPHJ’s document-scanning patents. MPHJ then argued that a recent ruling by the Vermont Supreme Court showed that Sorrell’s suit is “frivolous and cannot succeed.” MPHJ was referring to a December 13, 2013 court decision for Foti Fuels v. Kurrle Corp., in which the high court held that Vermont’s consumer-protection statute only applies to “practices that occur in the consumer marketplace.”

“One would expect that a party in the same position as the state should not be able to persist in maintaining what has become demonstrably sham and frivolous litigation without there being sanctions, remedy and recourse,” MPHJ said. “And, such sanctions remedy and recourse are in fact available and should be awarded in this case to MPHJ.”

In his lawsuit, the Vermont attorney general had argued that MPHJ deliberately targets small businesses that are unsophisticated about patent law in the hope that the companies will quickly concede to MPHJ and pay its licensing fees.

Nebraska Attorney General Jon Bruning has also sought to block MPHJ’s activities, ordering MPHJ’s law firm to stop sending demand letters that seek licensing fees for companies using their MFPs’ scanning. However, a federal judge in Nebraska granted MPHJ an injunction that barred Bruning from enforcing his order, ruling that it interfered with MPHJ’s First Amendment right to assert its patents and hire the counsel of its choosing. MPHJ is trying to use this Nebraska ruling to block Vermont’s enforcement actions.

Late last year, MPHJ also filed suit against the Federal Trade Commission over the agency’s investigation of its tactics.

More Resources:

Judge: MPHJ Technology Can Continue Sending Cease-and-Desist Scan-Patent Enforcement Letters

MPHJ Technology Files Lawsuit Against U.S. Federal Trade Commission; Anonymous Owner is Revealed

MPHJ Technology Files Scan-Patent Infringement Lawsuits Against Four Companies, Including Coca-Cola and Dillard’s

MPHJ Sues First Company over Alleged Scan-to-eMail Patent Violations

MPHJ Technology Sues Nebraska Attorney General, Claims AG Violated its Right to Assert its Patents

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