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First Government Lawsuit Against a Patent Troll

samzenpus posted about a year ago | from the when-the-man-comes-around dept.

The Courts 96

walterbyrd writes "Late last year, a vigorous and secretive patent troll began sending out thousands of letters to small businesses all around the country, insisting that they owed between $900 and $1,200 per worker just for using scanners. The brazen patent-trolling scheme, carried out by a company called MPHJ technologies and dozens of shell companies with six-letter names, has caught the attention of politicians. MPHJ and its principals may have gone too far. They're now the subject of a government lawsuit targeting patent trolling—the first ever such case. Vermont Attorney General William Sorrell has filed suit in his home state, saying that MPHJ is violating Vermont consumer-protection laws."

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Meta Troll (4, Funny)

locster (1140121) | about a year ago | (#43801663)

Sure, but I patented the process of suing patent trolls. Pay up.

Re:Meta Troll (1)

Anonymous Coward | about a year ago | (#43802761)

Hey. That was MY idea...Pay up.

Re:Meta Troll (2)

thaylin (555395) | about a year ago | (#43802907)

have fun. You cant sue the state unless the state lets you sue it.

Re:Meta Troll (1)

Frosty Piss (770223) | about a year ago | (#43803639)

have fun. You cant sue the state unless the state lets you sue it.

People here in Washington State sue the state (and often win) all the time.

Re:Meta Troll (1)

dcw3 (649211) | about a year ago | (#43804079)

People sue states all the time. See Article 3, Section 2 of your copy of the U.S. Constitution:
(The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority; to all Cases affecting Ambassadors, other public Ministers and Consuls; to all Cases of admiralty and maritime Jurisdiction; to Controversies to which the United States shall be a Party; to Controversies between two or more States; between a State and Citizens of another State; between Citizens of different States; between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.)

Re:Meta Troll (0)

Anonymous Coward | about a year ago | (#43804037)

relevant Doomed to Obscurity [penguinpetes.com]

Re:Meta Troll (0)

Anonymous Coward | about a year ago | (#43806773)

Sorry,

I patented the process of patenting process of lawsuits, as well the patent covers patents that cover and or patent processes needed to patent this patent.

I demand my $0.05

vermont? (0)

decsnake (6658) | about a year ago | (#43801667)

ho hum

wake me when the feds file suit

Nah, just keep on sleeping while the wheels turn (1)

luis_a_espinal (1810296) | about a year ago | (#43801787)

Sure, but I patented the process of suing patent trolls. Pay up.

Why? That's a little cynic/pedantic if you ask me.

See, this sets a state-level precedent for individual states to go after trolls. It is also easier to initiate as opposed to the Feds initiating it and the trolls cooking some stupid shit like the Feds lacking jurisdiction (arguing that it is a states' right manner, hard to argue, but in our systems of laws you can keep throwing shit against the wall till something hopefully sticks.)

Re:Nah, just keep on sleeping while the wheels tur (1)

nitehawk214 (222219) | about a year ago | (#43802063)

That is bizarre, your quote is from the FP and not the post you actually replied to.

Re:Nah, just keep on sleeping while the wheels tur (1)

JustOK (667959) | about a year ago | (#43802091)

I patented that, and response to such occurrences, so pay up.

Re:Nah, just keep on sleeping while the wheels tur (1)

nitehawk214 (222219) | about a year ago | (#43803801)

I will just assume your reply went to the wrong post as well.

Re:Nah, just keep on sleeping while the wheels tur (2)

JustOK (667959) | about a year ago | (#43805163)

It went to every post just in case.

Re:Nah, just keep on sleeping while the wheels tur (0)

Anonymous Coward | about a year ago | (#43802533)

It is also easier to initiate as opposed to the Feds initiating it and the trolls cooking some stupid shit like the Feds lacking jurisdiction (arguing that it is a states' right manner, hard to argue, but in our systems of laws you can keep throwing shit against the wall till something hopefully sticks.)

True, but this clearly involves inter-state commerce, making it indisputably federal jurisdiction. There's just no federal laws they can really go after these fuckers for violating. Individual state consumer protection laws are pretty much the only thing a state AG can go after them for that has a viable chance of succeeding.

Now if they abuse the MIT network to download a massive number of academic journals to which they have legitimate access, it may be a different matter.

Re:Nah, just keep on sleeping while the wheels tur (4, Informative)

Runaway1956 (1322357) | about a year ago | (#43802731)

"There's just no federal laws they can really go after these fuckers for violating."

RICO

http://www.wisegeek.com/what-is-rico-law.htm#did-you-know [wisegeek.com]

Re:Nah, just keep on sleeping while the wheels tur (-1)

Anonymous Coward | about a year ago | (#43803295)

We're going to hear a lot about RICO soon. Consider: a mob boss publicly says, eg "Cowboy Neil smells like a dead fish.". A couple days later, Cowboy Neil is killed. Coincidence? Of course not. Which brings us to Barack Obama. He names Mitt Romney donors in his speeches and campaign ads. A couple days later, they're being audited by the IRS and other agencies. Coincidence?

Re:Nah, just keep on sleeping while the wheels tur (1)

NicBenjamin (2124018) | about a year ago | (#43803557)

RICO can only be used if they can prove you also committed another crime. Which means somebody has to convict these guys of something before ANY conspiracy charges stick, much less RICO which only applies to certain crimes.

None of those crimes seem to be relevant to Vermont's lawsuit.

Re:Nah, just keep on sleeping while the wheels tur (2)

Runaway1956 (1322357) | about a year ago | (#43804195)

Extortion would be relevant. Organized extortion efforts across the nation would be very relevant. What's going on here is very much the same as a protection racket. "You pay me $100/week, and your home won't be broken into." Except, it's "You pay me $xxxx and you won't have to defend yourself in court." It's outright extortion.

Re:Nah, just keep on sleeping while the wheels tur (1)

NicBenjamin (2124018) | about a year ago | (#43804773)

That's a stretch.

They have this patent. That means they have the right to sue you for infringing it. That means they have the right to tell you "we will sue your ass if you don't pay us." To be extortion they'd have to threaten actual violence.

The legal options to thwart them are basically a) creative prosecutions such as this one, and b) patent reform. Since the Federal government runs patents, and the Federal government is designed in such a way that reform requires lots of people to really want it, b) is not a practical option.

Drive by patent trolling (2)

gd2shoe (747932) | about a year ago | (#43806399)

They have this patent. That means they have the right to sue you for infringing it. That means they have the right to tell you "we will sue your ass if you don't pay us."

Actually, they probably don't. They're not sending out threatening letters themselves, but are using forty different shell companies to send out their threats. That's intentional obfuscation. It's the sort of thing you'd do if you didn't actually hold the rights you're claiming.

And if they do own a patent, any patent, it isn't going to be for the end use of scanners. That is (pardon the pun) patently ridiculous. Of course, that would still need to be borne out in court, and the victims would need to shell out cash to lawyers to prove it.

To be extortion they'd have to threaten actual violence.

I'm not an expert in law, but this statement seems dubious. I wonder what it would take for this to be deemed extortion.

From Wikipedia

Under United States federal law extortion can be committed with or without the use of force and with or without the use of a weapon. A key difference is that extortion always involves a written or verbal threat whereas robbery can occur without any verbal or written threat.

Neither extortion nor blackmail require a threat of a criminal act, such as violence, merely a threat used to elicit actions, money, or property from the object of the extortion. Such threats include the filing of reports (true or not) of criminal behavior to the police,

This is a threat, not including violence, used to elicit money from another party and includes the threat of filing reports (probably quite false) with... not the police, but the judiciary.

I doubt the courts will be willing to besmirch their bread-and-butter with the term "extortion", but this is extraordinarily close to what's happening.

Re:Drive by patent trolling (2)

NicBenjamin (2124018) | about a year ago | (#43806575)

I didn't realize Federal law considered non-violent threats to be extortion.

But this still isn't going to count. The little shell companies have paperwork granting them the right to threaten to sue based on the patent, therefore they have the right to send you a letter threatening to sue. OTOH you do not have the right to a) file a false police report, or b) receive money in exchange for not reporting crimes. The difference between extortion and being a real hard-ass in negotiations is that an extorter would be breaking the law if he carried out his threats.

It's possible the 40-odd shell companies do not have the correct paper-work to sue based on these patents. It's equally possible they are misinterpreting the patent, or it was granted improperly. But since they don't actually file suit that never comes before the Courts, their right to sue is never challenged, and things like "extortion" simply don't come into play. They may be wrong, but they're idiots, not criminals, until a Judge rules against them.

That's why I love this case. It's pretty much the only way to get these trolls into court and figure out whether they are legally allowed to do this.

Re:Drive by patent trolling (1)

chrismcb (983081) | about a year ago | (#43808957)

The little shell companies have paperwork granting them the right to threaten to sue based on the patent, therefore they have the right to send you a letter threatening to sue.

No, they don't. (well not more than anyone else) Ignore the fact that the patents should be rubbish (one patent, filed in 2008, is for copying paper from a conventional copier to a remotely located second device) Lets completely ignore the fact that we've been able to do that for at least a dozen years before this patent was even filed. These patent trolls claim the devices don't go against the patent. Its only when the user uses the entire system (exactly the way the device was intended, but I digress)
But you know, any can sue anyone for anything. Your lawsuit might get thrown out of court, but you could still sue... or threaten to sue. And that is what these people are doing. They are threatening to sue, for something that the patents don't exactly cover... using what should be bogus patents.

Re:Drive by patent trolling (1)

gd2shoe (747932) | about a year ago | (#43810713)

The difference between extortion and being a real hard-ass in negotiations is that an extorter would be breaking the law if he carried out his threats.

"Neither extortion nor blackmail require a threat of a criminal act" - Now I'm not sure where the line is drawn, but this doesn't seem to be it.

Re:vermont? (0)

M. Baranczak (726671) | about a year ago | (#43802467)

wake me when the feds file suit

What, you mean the same feds who granted these patents in the first place?

But that's OK, you just go back to sleep. You're too tired to use the shift key, you obviously need the rest. I'll wake you up after I've drank all your beer and emptied your wallet.

Re:vermont? (1)

Runaway1956 (1322357) | about a year ago | (#43802739)

Don't forget to use and abuse all his women - he lacks the energy for that as well.

Re:vermont? (2)

dcw3 (649211) | about a year ago | (#43804167)

What, you mean the same feds who granted these patents in the first place?

Common mistake. There are no "same feds". The "feds" are people from all walks of life, and come with opinions that vary as much as the general population. The people who granted these patents will most certainly not be the same people who would file suit, and probably have never even heard of each other. Like most other stereotypes, this one is just wrong.

Re:vermont? (1)

gd2shoe (747932) | about a year ago | (#43806517)

Common mistake. There are no "same feds". The "feds" are people from all walks of life, and come with opinions that vary as much as the general population.

Apologies in advance. I'm about to be pedantic.

Federal employees do come from all walks of life, and their beliefs do vary as widely as the general population, but not "as much as the general population". Their beliefs have a tendency to cluster. The distribution is not at all the same as the general population.

Why do their beliefs tend to cluster, because they have common factors: traits that led them to chose to apply for work in the Federal government; traits selected or filtered out during the hiring process (to varying degrees depending on the job); a shared set of interests (pay, working conditions, retirement packages); and a shared set of experiences that shape belief over time.

None of these are terribly strong factors, and there are still wild differences between different federal employees. But they simply don't "vary as much as the general population". There are distinct clusters around particular job types and organizations.

Re:vermont? (0)

Anonymous Coward | about a year ago | (#43808399)

I've worked around "Feds" since the mid 70s, and while I'll agree that there are clusters, there are clusters in the general population as well. I've spent plenty of time working with them in various locations both in the US, and a few locations OCONUS. And, you'll notice those clusters are as different as regional differences are amongst the population from DC to SF to Omaha to Honolulu, and the deep south. Yes, there are (in IMHO trivial) differences, that for the sake of the topic above don't matter. For example, you have homeless, and poor, in the general population, not in govt. work. Yes, you won't find ex-felons (maybe some current ones though) among the Feds. But, this is just in my anecdotal 37 working years of experience.

Punishment (1)

O('_')O_Bush (1162487) | about a year ago | (#43801675)

I would say that pulling out innards from a tiny hole for coyotes to eat (a la Blue Duck) would not constitute cruel and unusual punishment.

They took it seriously? (5, Interesting)

Anonymous Coward | about a year ago | (#43801691)

The MPHJ letters also include misstatements. First, they imply litigation was imminent, stating recipients could be sued if they don't pay within two weeks, and they include draft complaints. Still, MPHJ hasn't filed a single lawsuit, in Vermont or anywhere else, more than 130 days since Vermont businesses starting getting the letters.

Also, the shell companies each state they have an "exclusive license" letting them enforce the patents against businesses within a specific geographic area. But the Vermont complaint states that "each Shell LLC was actually assigned a combination of geographic and commercial fields that was identical to at least one other Shell LLC," and thus the shells "do not possess exclusive licenses." The letters also state that "many" or "most" businesses show an interest in purchasing licenses, which isn't true, the complaint notes.

If I got a letter with that kind of language from an entity that has a name that looks like it was spewed out by a random letter generator, I'd chuck it into the trash thinking it was a scam. Because there are TONS of scams where "companies" bill for office supplies and other services that were never received with the hopes that the recipient would just pay it.

Re:They took it seriously? (4, Insightful)

FireFury03 (653718) | about a year ago | (#43801937)

If I got a letter with that kind of language from an entity that has a name that looks like it was spewed out by a random letter generator, I'd chuck it into the trash thinking it was a scam. Because there are TONS of scams where "companies" bill for office supplies and other services that were never received with the hopes that the recipient would just pay it.

And the fact that these scams keep happening demonstrates that there is money in it because some people fall for it. Same with spam. So the only way to stop these scammers is to actually litigate rather than just ignoring it, throwing it away and claiming it isn't a problem.

Re:They took it seriously? (4, Insightful)

Cenan (1892902) | about a year ago | (#43802033)

And the fact that these scams keep happening demonstrates that there is money in it because some people fall for it

And a really low barrier of entry into the market. All it takes is a carefully worded email and a public search on people to send it to, and you're good. You don't need to worry about court fees or anything, since you plan on dropping the case before any papers are filed.

Re:They took it seriously? (2)

Penguinisto (415985) | about a year ago | (#43803497)

And a really low barrier of entry into the market. All it takes is a carefully worded email and a public search on people to send it to, and you're good. You don't need to worry about court fees or anything, since you plan on dropping the case before any papers are filed.

It's almost as low a barrier as the stupid "executive directory" scams and the "your $domain.asia domain name has been bought up! For a small ($$$$$!) fee, we can secure it for you." emails.

The sad part is, as a former email admin, having to tell the CEO of your employer that such an email (which he pulled out of his quarantine folder) is a scam (and then still having to provide similar examples to prove it as such) is pretty effing sad sometimes.

Re:They took it seriously? (1)

Cenan (1892902) | about a year ago | (#43804715)

The sad part is, as a former email admin, having to tell the CEO of your employer that such an email (which he pulled out of his quarantine folder) is a scam (and then still having to provide similar examples to prove it as such) is pretty effing sad sometimes.

Oh that is just not right. And here I thought my boss was a moron for suggesting that adding an if-then-else was too complex a solution, he would like 2 separate methods instead. I bow my head in sympathy, having been trumped - you played the ace of idiots.

Re:They took it seriously? (1)

Kardos (1348077) | about a year ago | (#43802041)

Yet, litigating is expensive, and ignoring/throwing it away is cheap

Re:They took it seriously? (4, Insightful)

FireFury03 (653718) | about a year ago | (#43802093)

Yet, litigating is expensive, and ignoring/throwing it away is cheap

Which is why individuals can't be expected to do it - this is the government's job in the interest of protecting the law abiding public.

Spam doesn't actually have to work to profit. (0)

Anonymous Coward | about a year ago | (#43802177)

Because what's being sold isn't the product in the spam, but the idea that it could.

Marketing don't care if it doesn't actually work, there are plenty of reasons why anything doesn't work that is entirely not their fault. Add to that it would be impossible to find out of a spam mail actually made someone buy it and you have the result that the people dumb enough to fall for Spam DOESN'T HAVE TO EXIST.

All that has to happen is that someone has to be dumb enough to believe that anyone else is dumb enough to respond to spam and that person has to be in marketing.

That's all.

And marketing "know" that people are morons. Not THEM, obviously, but everyone else. That's why everything is marketed now for the lowest-common-denominator, MTV-10-Second-Attention-Span "Jenny Housecoat" now. TV, Movies, Games, Books, whatever. Because marketing think that everyone IS that sort of idiot and, moreover, cannot and will not enjoy or even try something hard like thinking.

Of course, Matrix and Inception come out and shock "the critics" by doing better than they expected, because they all believe that people are just plain dumber than they are. Not THEM, of course. Just everyone else.

So the spammer comes along and sells the idea that spam works and the marketer, "knowing" that everyone else is dumber than a custard brick, ignores the fact that THEY wouldn't fall for it in a second, and pays the spammer to do this. Marketer now thinks "Job Done, collect the bonus!" and the spammer knows "Job Done, find another sucker!".

Whether it works neither cares a toss for.

Re:Spam doesn't actually have to work to profit. (1)

geminidomino (614729) | about a year ago | (#43802703)

This is hardly a new phenomenon.

"No one ever went broke underestimating the intelligence of the American Public" -- H. L. Menken (1880-1956)

Re:They took it seriously? (1)

gstoddart (321705) | about a year ago | (#43802181)

So the only way to stop these scammers is to actually litigate

Oh, it's not the only way to stop these guys ...

Re:They took it seriously? (0)

Anonymous Coward | about a year ago | (#43804083)

Or people need to stop falling for the stupidity. Look at someone of average intelligence and remember that haf the population is dumber than that.

Re:They took it seriously? (1)

wisnoskij (1206448) | about a year ago | (#43808405)

But it is not a problem to competent people. Sure, I am all for the government protecting its citizens in this manner. But someone is going to scam that money out of the people who actually fall for it; There is no saving people from themselves.

Re:They took it seriously? (5, Informative)

Alan Dee (2856647) | about a year ago | (#43802085)

It happens far more common then most people think. I worked at a company where the Accountant was paying bills as they come in. It was only after she left and her replacement questioned it did we realize that we'd been paying a company like that for years.

Re:They took it seriously? (1)

Penguinisto (415985) | about a year ago | (#43803523)

If you pick an A/P department that is overly-busy, ignorant-as-hell, and/or way understaffed (many of them these days are), you could make a pretty tidy profit as a scammer, if you knew how to set it up right.

Re:They took it seriously? (2)

Solandri (704621) | about a year ago | (#43804443)

I've seen the same thing. Accountant got a bill looking like a subscription renewal to some expensive magazine. Since it as a renewal, he just paid it. Turned out nobody subscribed to the magazine, nor could remember ever receiving a copy of it.

Another common one is an official-looking letter sent by a company whose name makes it sound like a government office. The letter says your company needs to file its annual statement of information and includes a form and an invoice for $100. The company has nothing to do with the government, and filing your statement of information costs $20. So these scammers were making $80 off of each company taken in by their ruse.

After my dad retired, I found out he'd been paying these guys for 25 years. Around the 1990s, the government cracked down on these scams and required them to include "THIS IS NOT A BILL" and "THIS IS NOT AN OFFICIAL GOVERNMENT NOTICE" somewhere in the letter. But my dad is an immigrant with ok but not great English skills. So he would just read the beginning of the letter, decide it was a bill, and skip reading the rest.

Re:They took it seriously? (1)

rgbrenner (317308) | about a year ago | (#43807121)

there's another corporate scam: sending fake compliance notices that look like they are from the state w/ an official looking seal, citing some state law, and demanding $X for compliance. I've received 3 of them over the past few years.

If I'm willing to risk tossing a state notice in the trash, then the trolls letter has no chance.

This guy posted an image of one on his blog:
http://parasec.files.wordpress.com/2013/04/screen-shot-2013-04-05-at-9-23-41-am.png [wordpress.com]

Unintended consequences. (1, Insightful)

jacekm (895699) | about a year ago | (#43801699)

This is not neccesairly that good. I would rather see law change that prevents trolls. This development can easily evolve to a tool where large rich corporations will buy politicians to shut down legitimate small inventors. Generally I don't like governemtn to decide who is and who isn't a troll.

Re:Unintended consequences. (5, Insightful)

Sique (173459) | about a year ago | (#43801781)

Generally the goverment doesn't decide who is and who isn't a troll. The Attorney General can only sue based on current law, and the judge getting the case can only decide based on current law. "Patent Troll" is not a legal term, and MPHJ doesn't get sued for being a patent troll, but for fraudulently representing what they are selling (licenses to patents they claim to have exclusive rights on, which they don't have, for instance).

Re:Unintended consequences. (3, Informative)

gnasher719 (869701) | about a year ago | (#43802045)

Generally the goverment doesn't decide who is and who isn't a troll. The Attorney General can only sue based on current law, and the judge getting the case can only decide based on current law. "Patent Troll" is not a legal term, and MPHJ doesn't get sued for being a patent troll, but for fraudulently representing what they are selling (licenses to patents they claim to have exclusive rights on, which they don't have, for instance).

According to the article, they are in trouble because they threatened to sue people for patent infringement, when they had (1) not checked whatsoever if patent infringement had been committed, and when (2) they had no intent whatsoever to take anyone to court but only were interested in settlement payments.

They would have been fine if they actually had checked that there was at least a likelihood for patent infringement, and if they then had taken people to court.

Re:Unintended consequences. (1)

Sique (173459) | about a year ago | (#43807851)

According to the article, they are in trouble because they threatened to sue people for patent infringement, when they had (1) not checked whatsoever if patent infringement had been committed, and when (2) they had no intent whatsoever to take anyone to court but only were interested in settlement payments.

This was another one of the issues, yes.

Re:Unintended consequences. (1)

Anubis IV (1279820) | about a year ago | (#43802185)

Just to mention something, they already had a legal term for patent trolls before the Internet or whoever came up with that term. Companies that engage in these sorts of tactics are called NPEs: non-practicing entities. They're companies that litigate without actually making anything based on the patents that they hold, and you will find that term all over the place if you start looking into various patent trolling statistics and cases.

Re:Unintended consequences. (0)

Anonymous Coward | about a year ago | (#43802279)

But non-practicing entities itself are perfectly legal and have ethically justified use cases. This law suit is not about patents, it is about fraud.

A step in the right direction.... (2)

rts008 (812749) | about a year ago | (#43801711)

I applaud this.
Hopefully, it will catch on.

One crap article too far? (-1, Offtopic)

kooky45 (785515) | about a year ago | (#43801779)

It's a question cos I'm going to delete my Slashdot bookmarks and avoid the site for a while cos of this rubbish. When I come back it'll be with a fresh perspective!

Re:One crap article too far? (0)

Anonymous Coward | about a year ago | (#43801961)

It's a question cos I'm going to delete my Slashdot bookmarks and avoid the site for a while cos of this rubbish.

Nobody cares. Not even a little.

Re:One crap article too far? (0)

Anonymous Coward | about a year ago | (#43810723)

You cared enough to reply.

How is this different from Microsoft? (0, Troll)

Anonymous Coward | about a year ago | (#43801797)

Company come along in various guises through various subsidiary and makes vague patent claims against companies further down the chain demanding money.

How is it any different from the patent fraud Microsoft has been perpetrating against Android?

Re:How is this different from Microsoft? (1)

Penguinisto (415985) | about a year ago | (#43803591)

Company come along in various guises through various subsidiary and makes vague patent claims against companies further down the chain demanding money.

How is it any different from the patent fraud Microsoft has been perpetrating against Android?

One small problem, dear AC: To be fair, Microsoft actually has filed suits based on their patents, against specific companies, who in turn were proven to be using whatever technology is being contested (not sure how many of those suits actually made it to a verdict, though, since most settled either before or during trial).

While yes, most (IMHO) of Microsoft's patents and claims thereof are either crap or based on crap concepts, they're still legal.

Re:How is this different from Microsoft? (1)

GoogleShill (2732413) | about a year ago | (#43803971)

MS has used nearly identical tactics, but for copyright enforcement rather than patent enforcement.

My mom used to co-own a small, 3 person artists studio/gallery and received a very threatening letter from MS, saying that they were going to come into her studio and audit all of her computers for unlicensed software. If any was found they'd receive stiff penalties or potentially a lawsuit. The letter asked her to provide receipts and serial numbers for all of the software on her computers, and if she couldn't provide them, re-purchase them before the audit occurred.

She was really freaked out about this, thinking that they actually had the right to come into her studio and look around! Obviously, I explained to her that she could just ignore the letter, but I imagine /many/ people simply paid up due to the threat.

Federal Law Trumps (-1)

Anonymous Coward | about a year ago | (#43801799)

Federal Law protecting patent holders from unlawful use of their inventions trumps Vermont's State Law that attempts to interfere with a patent holder's right to seek remedy for unauthorized use.

Sorry, this will get laughed out of court on the first day.

Right idea, wrong reason ... (2)

MacTO (1161105) | about a year ago | (#43801813)

It's great to hear that these patent trolls are being held to account, but it looks like it is being done under consumer protection laws. Yet the real problem isn't consumer protection. The real problem isn't even patents. The problem is an abuse of the legal system that has the potential to undermine the legal system, particularly in the public mind since they used the threat of legal action. (It would undermine the legal system in practice if they actually followed through with those threats.)

Probably legal, definitely wrong (0)

erroneus (253617) | about a year ago | (#43801893)

For a lawyer to cook up this operating scheme strongly suggests that what he is doing is technically legal in the sense that it is likely within the letter of the law.

If nothing else defines what is wrong with the notion that "legal == right" this does. (Yes, I know there are things that do this better.)

I think a very simple law should be put into place which outlaws "NPEs." That would put a dent in the operations of these low-overhead trolls. But it would serve to embolden a select few who would claim to have a failed business based on their patent holdings and seek out damages from these others who are 'doing it better.'

There is no single silver bullet. But reforming the patent system, which effectively lies about the human condition by suggesting that nothing would be invented without a profit motive, one or more failing aspect of the patent system would be addressed.

The more I think about it, the more I think that any such "NPE" limitations should be carefully considered. Such measures threaten to raise the bar preventing pedestrian inventors from participating in the patent system leaving it available only to big business.

I think it will be difficult to stop the trolls without hurting real people.

Re:Probably legal, definitely wrong (2)

gnasher719 (869701) | about a year ago | (#43802011)

For a lawyer to cook up this operating scheme strongly suggests that what he is doing is technically legal in the sense that it is likely within the letter of the law.

If you look at Prendalaw, it more suggest that the lawyer thought he could get away with it. They often can. Sometimes they can't.

Re:Probably legal, definitely wrong (2, Informative)

gstoddart (321705) | about a year ago | (#43802035)

I think a very simple law should be put into place which outlaws "NPEs." That would put a dent in the operations of these low-overhead trolls.

Even more so, don't let them directly sue consumers.

If I can walk into Wal Mart and buy a product, and you think that product infringes on your patent, you can sue the company who made it, but the consumer can't be sued.

This is a case of people being sued for using scanners -- technology we've had ready consumer access to for quite a long time.

Consumers should be indemnified from such things -- they didn't infringe on your patent, they probably have no idea what you're talking about. By the time you can walk into a retail store and buy a product it should be too damned late to sue consumers.

This is just shaking down people who are using stuff that has been readily available since the 90s, and which you can buy damned near anywhere -- what's a scanner cost these days? An all in one printer is what, $50?

If they haven't been filing patent lawsuits by now, they've essentially given up any rights to be suing anybody, let alone end users of technology which an be picked up pretty much anywhere.

Re:Probably legal, definitely wrong (1)

gstoddart (321705) | about a year ago | (#43802081)

Assuming of course, they ever actually owned any patents, which I'm not certain they did in this case.

Re:Probably legal, definitely wrong (1)

Anonymous Coward | about a year ago | (#43802955)

My "company" received one of these letters. I use quotation marks because it was address to our location to an old name for our company that hasn't been used in years. It is a name associated to a small business, but none of the much much larger business under which we official go these days have received such letters. They are most certainly targeting small businesses that can't afford legal consul while ignoring larger businesses who have lawyers on retainer and could easily afford to litigate.

They ask four questions in their letter to determine if you are infringing the patents
1. Do you use document scanning equipment that is network addressable.
2. Do you use MS Exchange/Outlook, Lotus Domino/Notes, or a compaable system for company email.
3. Are employee email addresses loaded into the scanner or are the addresses able to be entered.
4. Can the scanner transform the paper document into a pdf file and have it transmitted to email by pressing one button.

So their logic is that the scanner itself is not infringing (so companies like Sharp and Brother aren't liable) but the act of connecting the scanner to a network and having it send scanned documents as PDF files is infringing on a patent. That is what they believe makes the end consumer liable.

Captcha: certify

Re:Probably legal, definitely wrong (0)

Anonymous Coward | about a year ago | (#43803005)

Also, if you're interested in the patents that they cite.

6,185,590 - http://www.google.com/patents/US6185590
6,771,381 - http://www.google.com/patents/US6771381
7,477,410 - http://www.google.com/patents/US7477410
7,986,426 - http://www.google.com/patents/US7986426

Re:Probably legal, definitely wrong (1)

gstoddart (321705) | about a year ago | (#43803251)

So their logic is that the scanner itself is not infringing (so companies like Sharp and Brother aren't liable) but the act of connecting the scanner to a network and having it send scanned documents as PDF files is infringing on a patent. That is what they believe makes the end consumer liable.

Well, then they can sue the companies who made the technology for scanners which integrate with your email system.

It's not like those customers went out and built that functionality themselves and in the process infringed on a patent, they used a feature implemented by the company who sold it to them. To the company who uses it, it's a black-box.

So either the scanner companies are liable for producing an infringing product, or the companies who make the email systems are (which would be insane), or this is bullshit. I'm voting for the latter.

This is a shake down for after-the-fact licensing of features provided to you by someone else.

Re:Probably legal, definitely wrong (1)

erroneus (253617) | about a year ago | (#43805645)

Interesting thought, but in this world of "eBay" selling things sourced from China, that's sometimes hard to do.

That said, I also disagree with the notion of consumers being sued. What if I made the device with my own two hands using off-the-shelf components and some software I wrote?

Re:Probably legal, definitely wrong (1)

chrismcb (983081) | about a year ago | (#43809017)

>Even more so, don't let them directly sue consumers.

WHOA... Hold on. If you can walk into walmart and purchase product X. Then walk into Kmart and purchase product Y. Then walk into Costco and purchase product Z. Then use X, Y, and Z together against a patent, then you open yourself up for a lawsuit. Not Walmart, nor the manufacturer of product X.
That is what the patent trolls are claiming what is going on here. Buy a copier/scanner. Hook it up to a network. Copy a file and send it across the network (nevermind that isn't really what the patent is about) But that is what they claim (and nevermind that the device is performing exactly as the manufacturer designed it. The patent trolls claim it isn't. (Also ignore the fact that one of the patents was applied for just 4 short years ago)
While I believe the patent trolls are wrong, they are claiming this isn't a simple matter of buying a product and doing what that product is supposed to be doing.
A car analogy would be, you buy a car. Then take the car home, and hook some other device up to the car. (and thus breaking some random patent) Then claim "you can't sue me, I bought the car legally.

Reverse Psychology (2)

BlueMonk (101716) | about a year ago | (#43801943)

I wouldn't be surprised if the troll wasn't someone expecting to get money out of the practice, but rather some person or company sick of the flaws in the patent system, how easy it is to abuse patents, and how hard it is to get the government to take action on fixing it. Maybe someone just wanted to draw attention to the issue to have patent law locked down a little better to prevent such activities. I imagine someone writing all these letters, chanting all the while, "Stop letting me do this!"

Re:Reverse Psychology (1)

SargentDU (1161355) | about a year ago | (#43802017)

I wouldn't be surprised if the troll wasn't someone expecting to get money out of the practice, but rather some person or company sick of the flaws in the patent system, how easy it is to abuse patents, and how hard it is to get the government to take action on fixing it. Maybe someone just wanted to draw attention to the issue to have patent law locked down a little better to prevent such activities. I imagine someone writing all these letters, chanting all the while, "Stop letting me do this!"

And, bonus! if anybody sends them money. Huh? :)

Re:Reverse Psychology (0)

Anonymous Coward | about a year ago | (#43802115)

If you wanted to do that, you could try to patent a dozen mechanisms of government that are hundreds if not thousands of years old and then sue the all of the governments.

Re:Reverse Psychology (3, Insightful)

gstoddart (321705) | about a year ago | (#43802125)

I'm pretty sure this was just bullshit lawyering, not some principled stand of protest against the patent system.

This reads much more like shady asshole lawyers than any caped crusaders. Because good guys don't send threatening legal notices to innocent bystanders and demand settlement money.

Re:Reverse Psychology (2)

rahvin112 (446269) | about a year ago | (#43803099)

There is a massive surplus of lawyers. Many can't find work as a lawyer even years after graduating.

The sociopaths in the group are moving out and working scams created by a legal system focused towards fairness that allows it to be gamed by those who know the in and outs of making litigation as expensive as possible.

The hope is that the actions by these sociopaths will get some small fixes applied to the system to get rid of these people.

Re:Reverse Psychology (1)

redneckmother (1664119) | about a year ago | (#43804465)

There is a massive surplus of lawyers. Many can't find work as a lawyer even years after graduating.

The sociopaths in the group are moving out and working scams created by a legal system focused towards fairness that allows it to be gamed by those who know the in and outs of making litigation as expensive as possible.

The hope is that the actions by these sociopaths will get some small fixes applied to the system to get rid of these people.

Definition of "a shame": A bus occupied by lawyers goes over a cliff.

Definition of "a DAMN shame": Same bus, two empty seats.

Obama (-1)

Anonymous Coward | about a year ago | (#43802007)

When's Obama gonna start acting like the dictator the tea-party says he is and send his Homeland Security thugs to just grab these opportunistic, capitalist swine and throw them in his FEMA Concentration camps?

Re:Obama (0)

Anonymous Coward | about a year ago | (#43803507)

Whoosh...right over their heads again. This should be modded +5-Funny except that /.ers have obviously lost all trace of any sense of humor.
Another AC

Eminent domain (0)

Luciano Moretti (2887109) | about a year ago | (#43802205)

Seeing as every multifunction machine uses this and the government can't function without them now I feel this would be a good application of "Eminent domain" for the state to seize the patent for public use.

Re:Eminent domain (1)

NicBenjamin (2124018) | about a year ago | (#43803649)

Wouldn't help.

Under eminent domain rules you have to pay at least the fair market value of the thing you seize. Frequently you pay double or triple.

If these patents are valid, and do what the trolls say they do, they are worth a shit-load of cash. We're talking hundreds of millions, minimum.

If trolling is rewarded with a nine-figure check from Barack Obama, an awful lot of people are gonna start trolling.

Bravo Vermont (2)

pubwvj (1045960) | about a year ago | (#43802247)

I'm glad to see Vermont have passed the related legislation, initiated this lawsuit and hope they kill the troll. Quite frankly the legislation needs to be far stronger. If someone sues over a paten without actively marketing or producing a product with said patent then they should be considered a patent troll. Ideas are a dime a dozen. It is implementation, production, marketing and sales that bring the products to the users. The whole patent system should be simply eliminated. It was designed for a time when a much longer term was needed. Now that does not make sense with the rapid changes in technology and with the abuses of the system. Simple fix: eliminate all patents including all existing ones as well as not allowing new ones.

Re:Bravo Vermont (4, Interesting)

LynnwoodRooster (966895) | about a year ago | (#43802423)

Here's a question for you...

I have a patent (well, several, actually). I used this patent to make product at my own factory, and sold the product for 6 years. Then I wanted to get out of the manufacturing business, and back to my true love - engineering. I now license that patent to many other companies, and have taken action against infringement of my patent.

Given that I no longer actively market or produce a product with my patent, am I a patent troll? I did produce at one time, and other companies produce with my patent - but I, the sole patent holder, simply market and sell licenses to my patent. Am I a patent troll?

Re:Bravo Vermont (1)

Anonymous Coward | about a year ago | (#43802735)

If you don't take action against the infringing company manufacturing the product and are suing customers then yes.

Re:Bravo Vermont (2, Interesting)

Khyber (864651) | about a year ago | (#43802995)

"Given that I no longer actively market or produce a product with my patent, am I a patent troll?"

No, because you were a truly practicing entity.

You made the product AND the patent.

You didn't just buy a patent so you could sue.

Depends (2)

TheDarkMaster (1292526) | about a year ago | (#43803103)

Depends. What you have described suggests a case of correct application of patents, and I'm assuming that your example patents are valid (things that really are patentable).

While the troll act like a mobster, claiming to have patents on things unpatentable, obvious or clear cases of prior art. It relies on the fact that the U.S. courts have the ridiculous detail you have to pay dearly to defend himself from false accusations, and that therefore it would be cheaper to pay the troll demands than defend themselves in court.

PS: I think is a better idea just do not go in the "lawyers game", simply blow off the troll head.

Re:Bravo Vermont (2)

NicBenjamin (2124018) | about a year ago | (#43803843)

By the general definition of patent troll, no.

Patent trolls typically patent something that's obviously going to be needed in a few years, without doing any actual engineering work. Then when somebody does the engineering work they demand a cut of the profits. The technical "work" they do is about as difficult as that of Star Trek producers. There are actual diagrams of how a Phaser works, but nobody's ever built one. Patent trolls simply figure out how the parts of several potential future technologies would need to go together, diagram it, and then hope that everything turns out the way they want.

Sometimes trolls do the engineering work, but fail to bring anything to market. Australia's CSIRO actually invented things, but didn't do any of the engineering work required to bring products to a mass-market. They didn't publicize their findings very well, so when some people actually did the hard work of discovering this stuff independently and also the hard work of making the product easy to manufacture they could not patent it. The patent belonged to CSIRO already. So they paid CSIRO to use their own work.

Re:Bravo Vermont (1)

Solandri (704621) | about a year ago | (#43804559)

I think your case highlights where patent law needs to be changed. The patent is to grant you exclusive marketability for an invention for a limited time. If you are not marketing any product using the patent, you should not qualify for patent protection.

In other words, if you are manufacturing and selling a product which is covered by your patent, then you should be able to license it to others. If you stop selling significant quantities of the product however, you should not be allowed to license it anymore. You can however sell the patent entirely (giving up all rights, except maybe a reverse licensing deal should you ever decide to make the product again). i.e. Either use the patent yourself to make money, or sell it to someone who will. Eliminate the case where you aren't using the patent but are still making money off of it.

Not in the least (1)

ThatsNotPudding (1045640) | about a year ago | (#43804677)

You provided goods / services whether directly or indirectly via that patent. Not trollish in the least.

That said, there needs to be (time) limits. We, as a society, do not need your grandchildren having a right to sue for having done nothing but being your relations.

Re:Not in the least (0)

Anonymous Coward | about a year ago | (#43805237)

"You provided goods / services whether directly or indirectly via that patent. Not trollish in the least."

I disagree that this alone is a determination of if someone is being a patent troll. Someone else said it more accurately. At this point it determines how you're doing your litigation - if you are just threatening people with litigation in hopes of free money and/or going after end consumers, yes you're a troll.

So. Are you dropping your claims the second someone you complain to challenges you or are you willing to go to court over it? If you are going to go to court, then you're not trolling for cash.

Re:Bravo Vermont (1)

gonzo67 (612392) | about a year ago | (#43806245)

I would say that if you invented the thing that you hold the patent on, then the answer is no.

However, if you were simply someone who bought a patent from someone else and sued based on that, then the answer would be yes.

Re:Bravo Vermont (1)

SleazyRidr (1563649) | about a year ago | (#43806403)

Even though your question has been answered already, I'll jump on the Bandwagon.

The fact that you used to produce the product in question doesn't really factor into a troll or not. you say that you license them to other companies, and have taken action against infringment of your patent. While you may fall into some people's definition of a patent troll, I understand that you have not acquired a patent and let it sit on your shelf until enough it has entered widespread use before you took action against it. That means that in my book you are an awesome inventor :)

Some people have talked about bringing in rule similar to trademark rules, where if you fail to enofrce it for long enough you lose it, that may be a little harsh, but once something enters to common market, it really is too late for these trolls to come out and make their demands. People have built their lives around what they thought was an open technology, and now troll want to rip it away. As long as I didn't just describe you, you're golden.

Re:Bravo Vermont (0)

Anonymous Coward | about a year ago | (#43809451)

No, because unlike the patent troll you are an inventor. The trolls typically get patents they had nothing to do with inventing or producing. If you are an inventor or produce the patent, then no you are not a troll, you are an entrepreneur. Patents are a monopoly that is only forgiven because you disclosed your innovation to the public in exchange for your exclusivity. Patent trolls do not disclose anything to the public (We the People) since this has already been disclosed before them.

Good question. and you are not a troll. Sleep well.

Mail Fraud (0)

Anonymous Coward | about a year ago | (#43802575)

Just start handing these letters over the the Fed. and screaming mail fraud.

This is especially applicable in the Project Paperless lawsuit where the plaintiff just walked away. They pulled the trigger on the lawsuit, retaliation is required! Disbar the lawyers and let them spend some time in Fed Supermax as an example.

Other options (0)

Anonymous Coward | about a year ago | (#43802919)

I was talking with somebody else about this a couple of weeks ago and they said "If I ever received a letter from a patent troll trying to extort money from me, I would respond in a very serious way, and I don't care if it's legal or not."

Clearly people have had enough, and feel they have no recourse by due process. I imagine there will be a lot of company officers and board members in harms way in the near future.

$1200 per employee to use a scanner? (1)

Anonymous Coward | about a year ago | (#43803291)

What a ripoff.. I wouldn't pay those guys a penny over $699.

good old communist vermont (-1)

Anonymous Coward | about a year ago | (#43803949)

No amount of big goverment interference is enough in Vermont.

Ron Paul 2016. Take back America.

The VT AG missed the primary deception (0)

Anonymous Coward | about a year ago | (#43805565)

Sure, they said that most other companies were settling and that they were ready to follow with real lawsuits.
      Both of these are perhaps less that true.

But the primary deception was likely in crafting an amgibuois patent on an existing technology,
      convincing the patent examiner that it had a narrow scope to be allowed
      and then turning around and telling their victims that it had a broad scope and so applied to them.

Telling the same story two conflicting ways for your convinience is deception.
    Hopefully, they have to live with both.
        The broad scope might cause the patent to fail a post grant review.
        The narrow scope might open charges of extortion.

Should be interesting to watch.
         

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