MONTPELIER, Vt. (Legal Newsline) -- Vermont Gov. Peter Shumlin signed into law Wednesday a measure designed to protect companies in the state from so-called "patent trolling."
Patent trolling, defined as the predatory or deceptive claims of patent infringement, is a national problem and can often lead to costly litigation or settlements, Attorney General Bill Sorrell said this week.
According to his office, a recent Boston University study estimated the cost of patent trolling on the U.S. economy at $29 billion in 2011 alone.
U.S. Rep. Peter Welch, D-Vt., recently co-sponsored the Saving High-Tech Innovators from Egregious Legal Disputes, or SHIELD, Act of 2013 to address the problem. The Federal Trade Commission also held a workshop in December to address the issue.
Under Vermont's new law -- the first of its kind in the nation -- a court can consider as evidence a letter that does not provide the patent number, the name and address of the patent owner, or an explanation of how the target company's products or services infringed on the patent.
The court also can consider if the letter demands payment of a license fee or a response in an "unreasonably short" period of time.
The law also allows the attorney general to conduct civil investigations and bring civil lawsuits against violators.
The court also may award relief or damages.
The state filed its first lawsuit under the new law late Wednesday.
Sorrell sued MPHJ Technology Investments LLC, a Delaware company.
The complaint alleges that MPHJ Technology has engaged in unfair and deceptive acts under Vermont's Consumer Protection Act.
MPHJ Technology claims to have a patent on the process of scanning documents and attaching them to email via a network. The attorney general's complaint alleges that the company has sent letters containing multiple deceptive statements and demanding about $1,000 per employee, to many Vermont small businesses as part of a nationwide campaign.
At least two of those businesses are nonprofits that assist developmentally disabled Vermonters, Sorrell said.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.