Edited by: Yaping Zhang
In May 2014, another proposed bill to address abusive practices of patent assertion entities (PAEs), also known as “patent trolls,” came to an end. Senator Patrick Leahy, a sponsor of the bill, said he hoped “to return to the issue this year” because “[w]e can all agree that patent trolls abuse the current patent system.” In an interview, Senator Leahy blamed the bill’s failure on special interests that do not want to protect people from trolls.
There have been extensive legislative efforts to counter abusive patent litigation. According to Intellectual Property Ownership AssociationIntellectual Property Ownership Association, thirteen bills were introduced in Congress between May 2013 and February 2014. Certain PAEs have engaged in particularly obnoxious practices that appear to have motivated some of the legislative efforts.
In particular, provisions aimed at “bad-faith demand letters” are directed against practices exemplified by MPHJ Technology. According to the NY Attorney General’s office, in 2012 MPHJ purchased four patents and one patent application for one dollar. MPHJ began sending letters in September 2012 to businesses in all fifty states with fewer than one hundred employees. See Ex. F at 6, MPHJ Tech. Invs., LLC v. FTC, 2014 U.S. Dist. LEXIS 146288, No. 6:14-cv-11 (W.D. Tex. Jan. 13, 2014). Approximately 16,645 businesses received the letter, which stated that the recipient was likely infringing MPHJ patents by using a machine that could send a scan to email. The letters alleged that “many companies” had agreed to pay a fair price, which was usually between $900 and $1,200 per employee.