After a year of threats, first suit is filed over hated “scanner patents”

MPHJ sued a Plano company over its office scanner setup—which MPHJ has never seen.

Joe Mullin – Nov 20, 2013 2:10 pm | 101

MPHJ argues it's impossible to scan-to-e-mail without infringing the company's patents. Credit: Flickr user: slice

The notorious batch of “scan-to-e-mail” patents owned by MPHJ Technology has made its first appearance in court.

MPHJ became known earlier this year for sending out at least hundreds—and possibly thousands—of letters to small and medium-sized businesses. The letters state that the businesses infringe a slew of patents, which MPHJ lawyers say cover just about any scanner that’s set up with scan-to-e-mail capabilities. If the businesses don’t pay $1,000 per worker, they’ll be sued.

But these lawsuits have never actually materialized—until now. MPHJ has sued exactly one company, Research Now, based in Plano, Texas. The complaint (PDF) says that Research Now has infringed two of the newer MPHJ scanner-patents: Patent Nos. 7,477,410 and 8,488,173.

Research Now is being sued for using “at least one networked scanning system” that has features from the MPHJ scanner patents. MPHJ filed the complaint together with another shell company co-plaintiff, Networked Scanning Solutions LLC. MPHJ is the owner of at least 10 percent of Networked Scanning, according to disclosure documents filed in court.

The complaint acknowledges that the plaintiffs don’t actually know that much about Research Now’s office setup. They say they have looked at publicly available information about the company “as well as the information technology needs and infrastructures of companies generally of its nature and size.” With that research, MPHJ has “reasonably concluded” that Research Now infringes the patents. Where those claims are “not yet supported by direct evidence,” they’ll have better evidentiary support “after a reasonable opportunity for discovery.”

America’s least favorite patents

The single lawsuit comes after MPHJ’s demand letters have already created unprecedented turmoil. Big tech companies have been getting hit with patent demands for years, but when letters started showing up at the doorsteps of surveyors, nonprofits, and real estate dealers in small states like North Dakota and Nebraska, it created a political firestorm. MPHJ is under direct legal attack by state attorneys general in Vermont, Nebraska, and Minnesota, where it is accused of violating state consumer-protection laws.

Legal reform to stop “patent trolls” like MPHJ is the tech topic of the day in Congress recently. Earlier this month, US Senators from both parties tore into MPHJ at a hearing about patent demand letters. Senator Claire McCaskill (D-MO) called those who send demand letters “bottom feeders.”

“We consider [MPHJ] similar to garden-variety extortion,” said Republican Attorney General of Nebraska Jim Bruning. He described how MPHJ sent one letter to an Alzheimer’s patient in a nursing home.

In its short life, MPHJ has become a poster child for patent abuse. While politicians are divided about exactly what reforms will make the patent system better, the letter-writing campaigns brought by MPHJ are something that there’s general agreement on—no one likes it.

Bruning has confronted MPHJ in court but still doesn’t know who owns it. At a subcommittee hearing, Sen. McCaskill asked for whistle-blowers to come forward and reveal more about shadowy patent holders like MPHJ.