MPHJ are the notorious patent trolls who claim that any business that scans documents and then emails them owes them $1,000 per employee. Their corporate structure is shrouded in mystery, hidden behind a nigh-impenetrable screen of shell companies, but thanks to a lawsuit the company has launched against the Federal Trade Commission, we're getting access to some details about their extortion racket. The Electronic Frontier Foundation's Julie Samuels rounds up the most interesting tidbits including the fact that MPHJ believes that every business in America with more 100 employees owes them $1,000 per employee, no matter what industry the company is in.
MPHJ brought suit against the FTC because it claims that it has a First Amendment right to send threatening letters to small businesses.
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MPHJ has sent letters to approximately 16,465 small businesses nationwide.*
MPHJ sent more than 9,000 letters claiming that "most businesses, upon being informed that they are infringing someone's patent rights, are interested in operating lawfully and taking a license promptly" and that "[m]any companies have responded to this licensing program in such a manner." The letters also claimed that the price for a license—either $1,000 or $1,200 per employee—was reached through the responses of "many companies." However, when the first 7,366 of those letters were sent, MPHJ hadn't sold a single license though its "licensing program."*
Of the 16,465 letters that MPHJ sent, it only received 17 (yes, 17!) licenses. Yet the price of these 17 licenses was thousands of small businesses going through the stress and expense of facing a threat of patent litigation.*
MPHJ began sending letters in September 2012. It did not file an infringement suit until November 18, 2013—after it had been sued by the states of Nebraska and Vermont.In other words, this is run-of-the-mill extortion, or an attempt to get a quick buck out of small businesses. And not just some small businesses—essentially every small business. MPHJ believes that as long as a business has at least 20 employees and works in certain fields, such as the vaguely defined "professional services," it "very likely" infringes. And if a business has at least 100 employees, no matter what kind of industry it's in? Then, according to MPHJ, it, too, "very likely" infringes. You read that right. Every. Business. In. America.
