Patent Trolls Storm the FTC

By Dennis Crouch

MPHJ Technology v. Federal Trade Commission (W.D. Texas 2014)

In a bold lawsuit, patent owner MPHJ has sued the Federal Trade Commission and the Individual FTC Commissioners for "the unlawful interference and threats by the FTC against MPHJ and its counsel directed at stopping or impeding the lawful, proper, and constitutionally protected efforts by MPHJ to identify and seek redress for infringement of its US patents."

MPHJ has been publicly accused by a number of private and governmental entities of "shaking down small businesses" by alleging infringement of the company's patents that apparently cover a scan-to-email system. See US Patent 6,185,590; 6,771,381; 7,477,410; 7,986,426; and 8,488,173.

The basic push-back has been (1) that MPHJ has been going after small companies for infringement and (2) that its demand letters have been sent-out without the proper due diligence to ensure that the receiving entity is actually infringing. In its complaint, MPHJ alleges that:

The FTC's threatened suit is principally based upon the FTC's contention that if any U.S. patent owner threatens suit for infringement, even against a single infringer, and then fails promptly to bring suit for infringement, then that U.S. patent owner has committed an unfair trade practice under Section 5 of the FTC Act unless the patent owner bears the burden and can prove that at the time the threat was made, it intended to bring suit. Here, the FTC contends that MPHJ did not intend to bring suit at the time it allegedly threatened suit, and that such conduct is a violation of Section 5 of the FTC Act unless MPHJ can prove otherwise. Setting aside that the FTC's factual premise is false, and that MPHJ can show that it did intend to bring suit at the time the alleged threats were made, the FTC's legal premise is flawed on multiple grounds.

In the complaint, MPHJ walks through the steps that it took in preparing its demand letters. Basically, MPHJ "concluded that businesses having at least 20 employees would be very likely to have an infringing networked scanning system if they were in certain types of businesses, such as professional services" MPHJ then purchased "the best available commercial databases" of such companies and sent out close to 20,000 demand letters to businesses with fewer than 100 employees across the country and then followed those demand letters with second and third letters.

Following that mass enforcement campaign, the FTC got involved and threatened to sue MPHJ for unfair competition. "As a result, to secure its rights under the U.S. Constitution and federal law, and to stop the improper and ultra vires interference with and impingement of MPHJ's lawful and constitutionally protected patent enforcement rights, MPHJ is forced to file the present suit."

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50 thoughts on “Patent Trolls Storm the FTC

  1. One big problem with these enforcement efforts is that the patroller hasent bought the patent from the true conciever so the enforcement is fraudulent.

  2. From the complaint filed by MPHJ:However, much more substantive delays were incurred as the result of the numerous baseless actions taken by several state Attorney Generals, in addition to the FTC, all inspired by the filing of the suit by the Vermont Attorney General.That’s funny. Was the NY AG’s action also “baseless”? You know, the one that resulted in a settlement where the NY AG was permitted to publically describe MPHJ’s behavior as “deceptive”?The Klein Patents are unusual in that there are thousands of businesses in the United States that employ networked systems which satisfy at least one claim of the Klein Patents.I’m not sure that’s so unusual. The USPTO issues junk every week that could be used by a “clever” bottom-feeding patent attorney to threaten thousands of businesses. What’s “unusual” is there are actually patent attorneys that enjoy the taste of the bottom of the tank so much that they actually go ahead with their schemes. What’s not unusual is when the patent attorney in question is a Republican from Texas.Farney Daniels PC is a law firm whose partners have extensive experience in patent litigation, and are respected nationwide for their practice of law in that area.I have zero respect for Farney Daniels or their practice of patent law and I know I’m not alone. Farney Daniels should be shunned by people with integrity who care about our patent system.In representing a client engaged in patent enforcement activity, an attorney or law firm is not engaging in commerce as that term is used in Section 5 of the FTC ActDidn’t the Federal Circuit tell us in InterDigital that patent licensing (without any production of goods by the patentee) qualifies as a “domestic industry”? How can patent licensing be considered a “domestic industry” but also “not commerce” by the same Federal Court?Perhaps Section 5 needs to be amended to include something about patent trolls and their junky computer-implemented patents.

    1. “Didn’t the Federal Circuit tell us in InterDigital that patent licensing (without any production of goods by the patentee) qualifies as a “domestic industry”? How can patent licensing be considered a “domestic industry” but also “not commerce” by the same Federal Court?”That’s some pretty dust you are kicking up Malcolm.The simple answer is that licensing is distinct from any action brought at law.Or maybe you do not understand the difference between a patent holder monetization effort and an action at law to preserve rights? Yes, there is a difference even though the two things may be happening concurrently. Keep your eye on the ball as to who is engaging in commerce and the actual argument that an attorney representing someone at an action at law to preserve rights is distinct from a licensing opportunity.(add: No answer from the NIMBY man, who would have figured /eyeroll)

  3. I wonder if there’s anyone out there associated with Farney Daniels or Hill, Kertscher & Warton who would be interested in sharing information about the internal analyses of the validity of these various patents. I bet those analyses would be rather amusing to us patent attorneys who aren’t invested in these bottom-feeding ventures.

  4. Goddamnit, we have a constitutional right to harass people with frivolous lawsuits, and who is the FTC to say that us filing 20,000 lawsuits is abusive? /sarcasm off/Isn’t this the same outfit that just agreed to restrictive terms (imposed by the New York Attorney General) before it sends threat letters to New York-based defendants?

    1. Isn’t this the same outfit that just agreed to restrictive terms (imposed by the New York Attorney General) before it sends threat letters to New York-based defendants?Yes.link to inc.com…Going forward, NY-patent holders must make a serious good-faith effort to determine if a targeted business has engaged in infringement, which would prevent mass mailings of accusations to businesses. The new guidelines also require patent holders to explain in detail the basis of their claims, and they prevent non-practicing entities (NPEs)–or, companies that enforce patent rights to extract licensing fees–from misleading businesses about potential licensing fees.Patent trolls may no longer use attorneys to make threatening claims for which they have no basis. Finally, the new guidelines prohibit patent trolls from hiding their identities, so that businesses can get information about who’s suing them.”State law enforcement can’t cure all the ills of the federal patent system, but the guidelines established in today’s settlement will put an end to some of the most abusive tactics by placing the industry on notice that these deceptive practices will not be tolerated in New York,” Schneiderman said in his statement.One of those “ills of the federal patent system”, of course, is the absurd presumption of validity. Another related “ill” is the use of existing licenses as “evidence” of non-obviousness. The NY AG’s announcement (the content of which was surely discussed during the settlement, unless MPHJ’s attorneys are even more incompetent than was previously suspected) that MPHJ’s practices were “deceptive” would seem to undercut MPHJ’s position in the FTC lawsuit. Just a little bit, maybe.In other news, the Supreme Court just told patent troll Soverain to get a life:link to inc.com…Readers will recall that complete joke of a patent was widely licensed by “big guys” until Newegg pulverized it.

      1. More on the NY AG settlement:link to arstechnica.com…a new letter doesn’t boast about a “positive response” received from other businesses, since almost none have purchased licenses to [pathetic cowboy Mac] Rust’s portfolio.What a tool.The settlement shows that Mac Rust bought the patents from another patent assertion company for one dollar in 2012. It isn’t clear why the earlier owner, an operation called Project Paperless that centered on a Georgia law firm, was so eager to sell. “Because they were forced to!” LOL.The FTC complaint shows that one of the lawyers, Steven Hill, has continued to be involved in the licensing since the $1 sale.Nobody could have predicted.

    2. Goddamnit, we have a constitutional right to harass people with frivolous lawsuits, and who is the FTC to say that us filing 20,000 lawsuits is abusive?The hubris is remarkable. But we’ve seen it before. These guys either really believe in their snake oil, or they are incredibly skilled at pretending they believe in it.And everybody who disagrees with them is “jealous of their success.” Because … Constitutional right! Or something like that. People actually have gone out of their way to post comments here telling us that.Meanwhile, the same greedy, wealthy “Constitution-lovin'” Texas-style Republicans are doing everything they can to keep poor people from voting. Go figure.

        1. Well for starters they sued 20,000 businesses of 20-100 employees. Their logic for selection has no basis as to why they stopped at 100 employees. They didn’t have any particular reason for suing any particular defendant other than it fit into a class. They didn’t follow through on suits, etc.

          1. Ya OK they dident want to sue businesses to large with their unlevel playing field attorneys nor too small with their inability to pay what is a exorberant amount compared to the increased cost of a printer with the features I created. Ya 20000 lawsuits because they cant discriminate against any of them and dident follow through because they couldent afford it and the heat was being turned up on them for agressive behaviors to collect as much as possible before the tables turned against them

  5. “”concluded that businesses having at least 20 employees would be very likely to have an infringing networked scanning system if they were in certain types of businesses, such as professional services””Just put these people in jail already and be done with it.

    1. Here is a ‘helpful’ guide for prosecuting all these ev1l entities seeking to enforce patent rights (because trying to enforce patent rights is only one step behind having patent rights as the WORST THING EVA):link to listverse.com

  6. Is this right? It is an act of unfair competition to notify any infringer of patent infringement and to fail to promptly file suit?Is that there theory? Really?If this were in fact the law, it would by itself cripple the patent system.

    1. It is an act of unfair competition to notify any infringer of patent infringementI think the argument is that it’s “unfair competition” to cast your net over 20,000 people just because it seems “likely” (to you) that some of them are infringing your patent (and equally likely that hundreds or thousands of them are not).Of course, when the patent is computer-implemented junk, that makes things worse because regardless of any “presumption of validity” the fact is the USPTO is, at best, clueless when it comes to examining such junk and, at worst, they are in lying in bed with the worst of the worst.I’m pretty sure that if one would press MPHJ further on the details of their infringement “analysis”, you’d find them making all sorts of assertions or relying on beliefs about human reasoning and intelligence that are completely absent from the prosecution history of the pathetic junk they are waving around.

      1. MM, I think the State Attorney generals need standing to bring a class action on behalf of notified businesses to determine whether they infringe. I know that infringement usually is highly specific. But it cannot be that specific if 20000 notices are sent.

      2. This patent is like the other one I invented in the same time period with the flatbeded signatures at issue I sent the first document ever produced right into the patent office. The issue with the agressive enforcement is that the printers with the capibility to produce the function already existed instead of being built into only machines produced under patent and excluding the function on non patented machines

  7. I’m curious about the argument that MPHJ’s constitutional right to counsel is being trampled on by the FTC’s actions. It’s been a while since I studied constitutional law – exactly where does this constitutional right come from?

    1. Allegations: 1. MPHJ’s accused patent enforcement activity is protected by the First Amendment under the Noerr-Pennington doctrine.2. The FTC Defendants’ threat to bring action against conduct engaged in to satisfy the pre-suit investigation requirements of the federal courts is a violation of the separation of powers doctrine and an impingement upon the rights of the federal courts under Article III of the U.S. Constitution.3. The FTC Defendants Have Interfered with MPHJ’s Constitutional Right to Choice of Counsel. 4. The assertion by the FTC Defendants of a threat to sue MPHJ’s counsel for representing a patent owner engaged in patent licensing activity is conduct not within their authority or jurisdiction and is thus ultra vires.5. The assertion by the FTC defendants of a threat to sue MPHJ’s counsel, and their demands constitute an unauthorized, unlawful, and unconstitutional attempt to regulate the practice of law.

      1. Thanks for that summary, Dennis .Based on my limited recall of constitutional law, I think that # 3 (the constitutional right to choice of counsel) is a clear loser, if not entirely frivolous. #2 and #5 look pretty dubious to me. I at least understand #1, and #4 simply seems to be a sideways way of alleging that MPHJ’s conduct is not unfair competition. (I don’t understand the distinction between MPHJ and its counsel – they’re the same when it comes to judging their conduct in this matter, aren’t they?)Does bulking up the complaint with the weaker allegations really help, or do they pre-dispose the court against them?

  8. MPHJ “concluded that businesses having at least 20 employees would be very likely to have an infringing networked scanning system if they were in certain types of businesses, such as professional services”LOL. Of course, even this low level of “reasoning” was completely absent when these junk patents were examined in the first place.MPHJ can show that it did intend to bring suit at the time the alleged threats were madeMPHJ can show that it intended to sue 20,000 businesses?

  9. And to the extent the FTC went after perfectly legal behavior without solid evidence MPHJ acted wrongly (which is a very high bar), they should be nailed. Can any of the anti-“trolls” explain to me what is wrong *in principle* with an independent inventor or small company monetizing its invention by selling it to people who can sue for infringement when they don’t have the resources to do so themselves?

    1. what is wrong *in principle* with an independent inventor or small company monetizing its invention by selling it to people who can sue for infringement when they don’t have the resources to do so themselves?Is there anything wrong “in principle” with making up mythological storylines and passing them off as reality for the purpose of pleasing oneself?Nobody involved in this case “lacked the resources” to “monetize” a patent.All that’s lacking in this case is (1) a non-junky patent; and (2) patent attorneys who are capable of earning a living without feeding off the mucky bottom.Whatever advantage MPHJ thinks it is gaining by filing this complaint will be wiped out by the whirlwind they reaped.

      1. This is right-on. People in the patent assertion community look at MPHJ (the so-called “scanner trolls”) as a black mark on their business model, the bad apple that makes everyone else look bad.But I honestly don’t see how the case gets past a motion to dismiss. You cannot sue the government simply because it’s investigating you, particularly if you can’t show an impairment to anything you’re actually doing. If merely ‘threatening’ suit against someone for allegedly flimsy grounds, as MPHJ alleges, was actionable, then I suppose MPHJ would be on the receiving end of a lot of suits itself.

        1. 1) you can sue the government, because…2) this goes well beyond ‘just investigating,’ so…3) your vision of “gets past a motion to dismiss” needs some corrective attention.

            1. I realize that’s your knee-jerk reaction, Dennis, to back the patent holder no matter what. But it will be interesting for MPHJ to explain why it just agreed to refund the license fees to New York residents if its demand letters were not deceptive in some material way.My money is still on dismissal. This is basically a Bivens action, and I have yet to see any allegation here that’s anything beyond “just investigating.”

              1. Not sure I see how you think this is basically a Bivens action. I do not think that the party is seeking a monetary damage award from the Federal government, or someone within the Federal government.

      2. “Is there anything wrong “in principle” with making up mythological storylines and passing them off as reality for the purpose of pleasing oneself?”And the irony meter goes *tilt* once again…

      3. Well yes there was one person the true conciever who couldent afford to even file a patent on the in question invention let alone battle in court but I was espionaged out of the deal.

      4. I must have missed where certain commenters on this board refrain from the word “troll” when the patent-in-suit is “non-junky.”

    2. Can any of the anti-“trolls” explain to me what is wrong *in principle* with an independent inventor or small company monetizing its invention by selling it to people who can sue for infringement when they don’t have the resources to do so themselves? That’s not monetization of the invention, that’s monetization of the patent rights. A naked monopoly floating around has no societal value in and of itself. There’s no public policy argument in favor of the situation of someone who buys a patent simply to sue out of existence goods who were infringing before he had the patent rights. Consumers lose the good and the patent holder at the time has shown by his inaction that he doesn’t value his bargained exchange enough to utilize it.In any case, this particular issue is silly. MPHJ “”concluded that businesses having at least 20 employees would be very likely to have an infringing networked scanning system if they were in certain types of businesses, such as professional services”” is admitting the FTCs case. There was no particular suspicion that any individual business was infringing, no investigation of any kind, simply that they fell within a broad class that may be motivated to infringe. They didn’t have the manpower to handle suits that would arise from even a fraction of the letters they sent out. Paragraph 46 is the kicker – they know there’s infringement, but they don’t know who, so they’re just going to demand payment from everyone.

      1. More B$ from RG:”There’s no public policy argument in favor of the situation of someone who buys a patent simply to sue out of existence goods who were infringing before he had the patent rights.”How about the bedrock concept of alienability of property? Your statement is simply wrong in its breadth and on its face. Infringement is still infringement even if a party obtains the rights after infringement has happened.”Consumers lose the good and the patent holder at the time has shown by his inaction that he doesn’t value his bargained exchange enough to utilize it.”That’s not the right test under the law. First, there is absolutely no requirement in patent law that you have to make any products whatsoever, and second, there is no premise in patent law that gives others the right to infringe if you are not making a product. It matters not at all to the basic question of infringement (it does come in to play at the remedy level – but let’s not confuse remedy and rights, shall we?)As to this case in particular, the phrase “bad facts makes bad law” could not be more true. But the lynch mob mentality in evidence surely is not a good thing, and a more thoughtful, rational, and fully balanced view should prevail.(lol – love the downvote when what I have posted is completely accurate – sorry that the fact that I am right – yet again – makes somebody sad)

        1. Calm down man. I didn’t down vote you but you are indeed wrong. He asked me what was wrong in principle, I told him what was wrong in principle. Im not making a statement as to how the law is, I’m stating the policy reasoning which suggests that the law should change. There is no societal benefit to their actions in this case and society should not tolerate it.That being said, one facet of their scheme does already fall out-of-bounds – they are suing large swaths of companies not based on any particular suspicion but on the fact they belong to a class which, in patentee’s unsupported position, are likely to infringe. That is not a good faith basis for suit, their cited cases don’t support their position and even a lay person would know its wrong. He’s got a right against infringement? Well I’ve got a right against not being run over by cars that run red lights, can I sue everyone who has ran a red light or might I need more evidence that, you know, my rights were violated and violated by a particular defendant? This isn’t a bad facts make bad law situation, this is common run of the mill “do some basic homework before you take up people’s time” requirement that is applicable to every legal case.

          1. Except for the fact that society should tolerate it…Except for the fact that I am not wrong…On a third point, well, regarding the particulars of this case, you may be correct – but I already gave you credit for that (and yes, this very much is a bad facts makes bad law situation).As to any “do some basic homework before you take up people’s time” requirement that is applicable to every legal case.” I will also say that you are correct. But you miss the point that the responses being bandied about are in particular to patents (hence, the bad facts making bad law angle).

            1. Patent law doesn’t and has never existed for the purpose of making inventors wealthy. It exists for the purpose of improving the scientific arts. The monopoly is a tolerated means to an end. At some point the monopoly becomes a thing whose connection is so attenuated to the original inventor that the benefit to society (inducing him to share future inventions) is lost. When that point is reached Congress can and should end the grant. If you agree that this case is an example of the line being crossed, then shouldn’t there be a discussion about where the line should be? And if there should be, isn’t it unproductive to label one side a lynch mob?

              1. Your use of the word ‘improving’ needs to be understood in a different manner than most people take that word.”Improvement” includes things that are NOT a linear (or other magnitude) actual betterment over the existing state of art. “Improvement” also includes things that do not work as well, that are more expensive, and that do not measure up in any number of ways to the current state of the art. “Improvement” is not just paving a road – it is more akin to paving a parking lot.The reason for this is because innovation is not linear. Expanding the pool of human knowledge – even in those directions that appear less well off – is the goal, as tomorrow’s break-through can very well come from putting together several of those ‘less well off’ innovations.Further, watch your use of the phrase “scientific arts” as you risk conflating historical terms that do not match what I believe you are trying to say. You are better off simply using the actual correct phrase of Useful Arts.As to your view of attenuation from the inventor – that is pure B$. Right from the start the system was set up so that the patent property was fully alienable and there is absolutely NO continuing string back to the inventor. You are making up whole clothe a line that simply is not there.Finally, my labeling the particular response as being of a lynch mob mentally is completely accurate. You have offered nothing on point that can even remotely challenge that view.

                1. Right from the start the system was set up so that the patent property was fully alienable and there is absolutely NO continuing string back to the inventor. You are making up whole clothe a line that simply is not there. A patent always gave you the right to sue for infringement in every case, until an exception was carved out for surgical procedures. The system is not uniform now and the system has always been changeable. This is no different. I’m not exactly sure where you disagree as your response is mostly saying that I’m not stating the current law, which is what I’ve been agreeing with since the beginning, but:1) There is no doubt that Congress can, going forward, alienate any part of the patent right.2) Congress can probably withdraw the right to sue in certain circumstances from currently issued patents.3) Most everyone agrees that the situation described above and similar situations are untenable.4) Because of the foregoing, Congress can and should change the law.5) In order to do so, a debate needs to take place. Calling people who want to engage in how far in the wrong the current situation is “a lynch mob” is not helpful to fashioning a new standard.6) If your argument is that this situation is bad but that it is a necessary part of the patent process, I think you underestimate how easily one may carve out an exception here. This isn’t remotely normal or anticipated behavior. In other words, fine grain control exists.7) If your argument is that this behavior is beneficial, now we’ve reached a point at which talking to you isn’t going to help, you’re so far out of the mainstream in that instance that you can’t contribute.

                2. 1) Your reply is completely non-responsive to the points I have made. By law a patent right is a property right. Under extensive judicial doctrine, the alienability of property is a cornerstone of our government system. Award winning historical research has confirmed that aim of patent law was to enable that very same full alienability of property. You need to address each and every one of these in your quest to change the law.2) You completely ignore the concept of alienability of property, which extends far beyond just patent law. If you are going to mess with that concept, and try to do so ONLY in patent law, you will run into some severe problems of the eBay kind.3) Your attempt to misuse the term of “alienate” (as in Congress can alienate) is noted and rejected. To the attempt of what you appear to be saying, you are venturing into the realm of angels dancing on the heads of pins – ANYTHING at all can be attempted in law. That’s a rather meaningless point, and one that is not supported by what you have offered on the board to this point. Please use the reality of the law as it is now and how that law has actually developed over time in constructing your position.4) “Congress can probably… because of the foregoing… ” is unsubstantiated and unsupported open ended conclusory conjecture with no meaning. See my comment 3.5) Your 3) and 4) combine to be nothing but rubbish. Your “most everyone agrees” is far too sweeping and conclusory. You are assuming the answer you want is correct without even attempting to logically get there. As they say, the devil is in the details and the ends do not justify the means.6) Sure a debate should take place. I am not saying otherwise and I reject the implication that you are making that I am saying otherwise. That a debate is to take place has absolutely nothing to do with the fact that my comment on lynch mob mentality is accurate. You may not like the fact that my comment is accurate, but you are aiming your arrow at the wrong target by attempting to ignore the fact that my comment is accurate. What would instead be helpful would be to remove that mentality. Further, you assume that some new standard is served by the lynch mob mentality – that is error upon error and would only serve to fuel more lynch mob mentality (under the legal realism principle of ‘hey, it works”). We should be aiming higher than that.7) Your 6) and 7) is a weak parlor trick of trying to paint my views in a lose/lose manner, with strawmen on both ends. Thus it is summarily rejected as fallacious. Try again.

                3. 1) Congress has changed the rights that come with a new patent many times. If tomorrow Congress passed a law saying that all patents filed after 2015 had a term of 5 years instead of 20 it would be constitutional. There is no property right in an unfiled patent.2) The infringement of rights that the patentholder enjoys are remedied through a procedural process that Congress can control regardless of if the patent has issued. Congress could pass a law stating there is no presumption of validity in certain instances. Congress could cap the award in certain instances. Congress could remove statutory damages. Congress could compel licensing at a reduced rate based on the length of inaction. Congress can, and has, stated that in medical procedures you can a) obtain a patent and b) bring suit but that c) cannot recover damages or an injunction and that has been upheld. There are several bills being bandied about in Congress right now that would be applicable to this patent, to this situation, and would eliminate the patentholder’s ability to extort money from small business owners. There’s any number of solutions that don’t involve stripping someone of their right to transfer property that do involve reducing the value of their property being transferred.3) I have to assume your argument because you don’t make one, you just make random overbroad or pointless statements like lynch mob mentality. The holder has sent out 20k letters. The holder has brought no suits. The holder only targets firms that are a) large enough to pay a fee worth his time and b) small enough to be unable to afford a defense. The holder admits he has no objective basis to believe that any particular business that he sends a letter to is infringing. The holder attempts to explain his actions with a reading of law so terrible that even you would think he should have his license stripped. When someone engages in extortion (or at the very least appears to be open and obvious facts that would lead one to conclude they’re engaging in extortion), the proper response is to say that they should be brought into court to at least answer for their actions. This is all the FTC is doing.In response the holder makes a laughable argument that not only should he not answer, but that he should be awarded money for it even being suggested he is doing anything improper. You appear to stand with the holder. Let me ask you, does his characterization of the facts sound at all accurate? The FTC’s threatened suit is principally based upon the FTC’s contention that if any U.S. patent owner threatens suit for infringement, even against a single infringer, and then fails promptly to bring suit for infringement, then that U.S. patent owner has committed an unfair trade practice under Section 5 of the FTC Act unless the patent owner bears the burden and can prove that at the time the threat was made, it intended to bring suit. The only thing that will result from this is that a) MPHJ will get nothing out of this suit except lost time and b) the FTC will most assuredly bring suit against them now. This isn’t a lynch mob, and if it were, it is MPHJ that tied its own noose.

      2. It is the monitization of the invention for the inventor as he gets paid even if he is not the correct inventor such as is the case in all marketable inventions due to our defective patent system and the money monopoly of not being able to obtain funds or legal representation due to indegency the illegal money monopoly creates.

      3. We should remember that when I created the troll (patroller) it was to counteract the unlevel playing field created by the money monopoly of big business. The incentive to create must be maintained for inventors or inventions are lost to the black hole of non conception leading to economic stagnation like we are now experiencing 9 years running. Add retartive patent reform with 40 methods of cheating the inventor and youve got total system shutdown as far as significant job creating new product inventions.

      4. That’s not true – 1) one benefit of the “naked patent right floating around” is that the invention is PUBLISHED (and in a highly indexed, accessible way) and can enter the public domain when the patent expires. So even if I invent a solution to the energy crisis and don’t use it immediately I’ve cured the energy crisis in the long term. 2) The government ALWAYS has the right to use an invention and pay a royalty on it, so there’s no way to completely bottle up a patented invention even during the term.

        1. 1) No, the benefit of originally giving the monopoly to the inventor causes that. Making the monopoly alienable to the inventor has no societal benefit other than its a further monetary incentive. At some point, however, the trading of the monopoly becomes such a tenuous connection to the monetary incentive TO THE ORIGINAL INVENTOR that it doesn’t serve the public interest. Once the inventor makes his original sale of the patent he likely sees no more money, and now they’re just an unregulated monopoly floating around for people to horsetrade on.2) That doesn’t really fix the problem though. Someone is responsible for wi-fi. Imagine if he chose not to license it – nobody but the US government could use wi-fi for 20 years. Keep in mind that other countries still could, which they would know a) right after our patent is published and b) could certainly develop within the 20 year span that we don’t have it.Once you agree that not every use of patent rights results in a public good, the question is what relatively simple and easily defined situations can we identify that should be taken out from the patent right or otherwise modified. This case represents that situation.

  10. To any extent to which MPHJ engaged in misrepresentation to further their agenda, they should be nailed.add: maybe the punishment should be to drag them through the remains of Malcolm’s glass house…

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