Yesterday we reported on Apple still being one of the top targets of Patent Trolls and today we're learning that New York State is stepping up their war against Patent Trolls as well. The Wall Street Journal confirms today that New York's attorney general is joining the likes of Apple, Google, Congress and the White House in their battle against Patent Trolls.
The Wall Street Journal reports that "Eric T. Schneiderman, New York state's top prosecutor, has reached a civil settlement with Delaware patent firm MPHJ Technology Investments LLC, barring it from using what he called deceptive tactics to get New York businesses to pay for patent licenses, according to the agreement.
While the settlement currently applies only to MPHJ and New York State, the attorney general intends to apply the agreement's terms to other firms that buy up patents and seek to make money from them through licensing and litigation.
A statement from Mr. Schneiderman's office states that "The requirements imposed on MPHJ in the settlement should be viewed by other patent trolls as the minimum standards that such entities…must follow to avoid liability."
MPHJ owns several patents relating to the process of scanning and emailing documents. In recent months, according to Mr. Schneiderman's office, MPHJ sent more than 1,000 letters to small and medium-size New York businesses accusing them of using equipment that infringed those patents.
MPHJ sent demand letters from 100 different subsidiary companies, according to Mr. Schneiderman's office, which "made it more difficult for targeted businesses to find information about the Company," and required its targets to sign nondisclosure agreements before it would tell them basic information about the patents at issue.
As part of the settlement, Mr. Schneiderman issued guidelines to be followed by other patent firms. For instance, firms must reveal their true identities when making demands and make a "serious, good faith" effort to determine whether a business actually infringes a patent before sending a threatening letter.
On December 5, 2013, The US House of Representatives overwhelmingly passed the "Innovation Act" bill on Thursday aimed at discouraging frivolous lawsuits by patent holders. The move was backed by companies like Apple, IBM, Cisco and Google. House Judiciary Committee Chairman Bob Goodlatte (R., Va.) sponsored the bill, which won strong bipartisan support in passing by a 325-91 vote. Goodlatte said his bill "takes meaningful steps to address the abusive practices that have damaged our patent system and resulted in significant economic harm to our nation."
In Addition to the new act, the FTC is currently examining the practices of patent trolls or Patent Assertion Entities (PAEs) which are firms with a business model based primarily on purchasing patents and then attempting to generate revenue by asserting the intellectual property against persons who are already practicing the patented technologies. The FTC is conducting the study in order to further one of the agency's key missions—to examine cutting-edge competition and consumer protection topics that may have a significant effect on the U.S. economy.