Minnesota Attorney General Settles with Delaware Company to Stop "Patent Trolling"

On August 20, 2013, the Minnesota Attorney General’s Office announced a settlement with a Delaware company (MPHJ Technology Investments, LLC) to “cease ‘patent trolling’ in the State of Minnesota.”  The AG’s settlement included an “Assurance of Discontinuance” characterized by the AG as

. . . believed to be the first settlement of its kind in the nation between an Attorney General and patent troll, MPHJ Technology must cease its patent enforcement campaign in the State of Minnesota and cannot resume such business activities in Minnesota without the permission of the Attorney General.  The settlement also prevents MPHJ Technology from assigning its patents to anyone who does not agree to be bound by these terms.

According to a related story by the Minneapolis / St. Paul Business Journal, MPHJ Technology Investments will also pay a $50,000 fine and refund any payments made by Minnesota companies or residents.

The AG’s press release detailed the activities of MPHJ Technology:

The Attorney General’s Office began to investigate MPHJ Technology for violations of state consumer protection laws last spring, after receiving complaints from several Minnesota small businesses that were targeted by the company.  MPHJ Technology, through its affiliates and law firm, sent a series of increasingly threatening letters to small businesses that alleged infringement of its patents for using basic office equipment to scan documents to e‑mail.  The letters pressed businesses to pay a fee of $1,000 to $1,200 per employee for a license in order to avoid litigation.  Many of the letters promised litigation — and some even included a draft lawsuit to be filed in federal court — if the business did not respond or purchase a license.

 

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