Recent Settlement Spells Trouble for Patent Trolls

Due to a recent settlement agreement with the Minnesota Attorney General, patent troll MPHJ Technology Investments, LLC has stopped enforcing specific patents within the State of Minnesota. The patents in question taught a commonly used method of the using basic office equipment to scan documents into e-mail.

“Patent trolls shake down small businesses to pay ‘license fees’ they may not owe to avoid threats of costly litigation,” said Attorney General Lori Swanson.

For those who are not aware, patent trolls are companies who acquire patents without the intention to actually use the patent to develop a product. Instead, these companies will send menacing letters to small companies, who may or may not be violating said patents, hoping to extract a licensing fee from these companies.

Patent trolls tend to send these letters out with little or no background research, threatening legal action when there likely are not grounds for such action.

The small companies who are threatened by the trolls are then stuck between a rock and a hard place, choosing either to pay the troll a licensing fee they don’t deserve, or face potentially even more expensive legal fees.

MPJH was taking exactly this sort of action, sending letters to small companies demanding $1,000 to $1,200 licensing fees per employee, with the threat of legal action if the small companies chose not to comply.

MPJH’s agreement to stop action in Minnesota is thought to be the first of its kind. As MPJH is also engaged in patent enforcement suits in Maine and Vermont, it will be interesting to see if those actions result in similar outcomes. If they do, it may spell the beginning of the end for patent trolls, which is good news for small businesses and independent inventors everywhere.