SAINT PAUL, Minn. (Legal Newsline) - Minnesota Attorney General Lori Swanson announced a court order on Tuesday against a Delaware company to stop the company from engaging in the practice of patent trolling.
MPHJ Technology Investments LLC allegedly targeted thousands of businesses for using basic office equipment to scan documents to email. Under the terms of a landmark assurance of discontinuance, MPHJ Technology must stop its patent enforcement campaign in Minnesota and cannot resume its business activities in the state without Swanson's permission. The settlement also stops MPHJ Technology from assigning its patents to anyone who does not agree to be bound by such terms.
"Patent trolls shake down small businesses to pay 'license fees' they may not owe to avoid threats of costly litigation," Swanson said.
MPHJ Technology, through its affiliates and law firm, allegedly sent threatening letters to small businesses alleging infringement of its patents for using basic office equipment to scan documents to email. The letters allegedly urged businesses to pay a fee of $1,000 to $1,200 per employee for a license to avoid litigation. Many letters allegedly promised litigation if the business did not respond or buy a license.
Patent trolling occurs when companies buy patents without the intention of developing or making a product. The patent trolls then target small businesses with aggressive litigation threats. A Boston University study found the cost of patent trolling in 2011 was approximately $29 billion.
"While this settlement and court order may affect one patent troller, the practice of 'patent trolling' will continue until Congress enacts laws to prohibit such activity," Swanson said.
The assurance of discontinuance may be the first instance of a patent troller agreeing to stop targeting businesses in a state.