Vermont AG Suit against ‘Patent Troll’ MPHJ Technology to Proceed

In a key decision unfavourable to notorious “patent troll” MPHJ Technology Investments, Law360 reports that a suit filed by the Vermont Attorney General accusing MPHJ of violating state consumer-protection laws will move forward in Vermont state court after the Federal Circuit tossed MPHJ’s appeal that argued that the case involves federal patent law, and shouldn’t be heard in the Vermont court.

The Federal Circuit’s decision means the case will now be heard in Vermont state court, where it was originally filed last year, Vermont Attorney General William Sorrell said.

MPHJ said in a statement that it “respectfully believes the panel erred, and we will be asking the full court to review the panel’s decision.” MPHJ added, “It is important to note that this ruling did not address substantive case issues.” MPHJ’s attorneys argues that the U.S. First Amendment protects patent-enforcement, and that the U.S. Fourteenth Amendment prevents patent owners from being subjected to the jurisdiction of states in which enforcement letters are sent.

Vermont Attorney General William Sorrell filed a lawsuit against MPHJ in May 2013, arguing that the firm’s patent-enforcement activities violated that state’s consumer-protection laws. For over about two years, MPHJ Technology, which acquired the U.S. ‘426 scan to email from Project Paperless in December 2012, has been suing hundreds of small businesses throughout the United States, alleging that any company using an MFP or All-in-One’s scan to email is infringing upon the ‘426 patent that it holds. In letters from lawyers to these companies, MPHJ typically seeks between $900 to $1,000 per employee for allegedly infringing on the patent.  MPHJ sends the letters through various shell companies – 40 of which the Vermont complaint names.