Posts Tagged: "MPHJ Technology Investments"

More Dreck on Patent Trolls from Attorneys Cozying Up to Silicon Valley

Principe and Rudroff unfortunately regurgitate much of the misguided dialogue, which has done nothing to serve this country except to decimate its patent system in recent years. In the view of the authors, patent trolls, or patent assertion entities (PAEs) (which the authors note is the less pejorative term), provide no market value and often enforce software or business method patents which have questionable validity. Of course, it is worth noting that in its 2016 study on PAEs, the Obama Federal Trade Commission called the term “patent troll” both unhelpful and prejudicial, and also specifically recognized that PAEs can and do play a valuable role in the market. So the conclusions of Principe and Rudroff are not supported by even an FTC study commissioned for the purpose of condemning patent trolls.

Steve Brachmann & Gene Quinn

July 23, 2018

Loan fraud charges filed by SEC target notable patent troll Jay Mac Rust

The patent trolling by MPHJ and owner, Texas lawyer Jay Mac Rust, are well known. But now the SEC is going after Jay Mac Rust in federal court for fraud. The SEC’s complaint maintains that Atlantic had “no ability or intention to obtain these loans.” Rather, of the money the two collected, the SEC alleges that Rust took $662,000 from client funds for personal pay and risky securities investments; Brenner himself took $595,000, and both made investments claiming that the money was personally theirs and not from the client funds. Investigations at a brokerage firm where these trades were taking place led the SEC to discover the fraudulent activities.

Steve Brachmann

May 27, 2016

FTC Approves Final Order Barring PAE From Using Deceptive Tactics

The order bars the company, MPHJ Technology Investments, LLC, and its law firm from making deceptive representations when asserting patent rights. The settlement with MPHJ, announced in November 2014, is the first time the FTC has taken action using its consumer protection authority against a patent assertion entity.

Federal Trade Commission

March 17, 2015

Nebraska to Pay $725K Because of AG Meddling in Patent Case

The United States District Court for the District of Nebraska ordered outgoing Nebraska Attorney General Jon Bruning to pay $325,000 for attorneys fees and costs to ActiveLight, Inc. and to pay another $400,000 in attorneys fees and costs to MPHJ Technology Investments, who had intervened in the matter. Bruning had demanded that the attorneys for ActiveLight and MPHJ stop engaging in patent enforcement activities in the State of Nebraska, a gross overreach of his authority as a State Attorney General and done with little or no investigation that would suggest any violation of State law.

Gene Quinn

December 3, 2014

FTC Bars Patent Assertion Entity From Using Deceptive Tactics

The settlement with MPHJ is the first time the FTC has taken action using its consumer protection authority against a patent assertion entity (PAE). PAEs are companies that obtain patent rights and try to generate revenue by licensing to or litigating against those who are or may be using patented technology. “Patents can promote innovation, but a patent is not a license to engage in deception,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Small businesses and other consumers have the right to expect truthful communications from those who market patent rights.”

Federal Trade Commission

November 6, 2014

Dear Patent Troll: Drop Dead

In 2012, Mr. Rust bought five patents from an inventor named Laurence Klein for exactly $1. He then set up 101 separate limited liability companies (LLCs), each with bizarre six letter names like IsaMai, BriPol, and HarNol. No one but Mr. Rust knows what those acronyms mean. But thousands of Mom and Pop small businesses — 16,465 to be exact — soon found out that they translate as “trouble.” Each of these businesses received a “demand letter” from one of Rust’s shell companies accusing them of patent infringement and demanding roughly $1,000 per employee if they wanted to avoid a minimum six-figure (and possibly seven-figure) lawsuit in U.S. federal court. There’s a word for that: “bully.”

Scott Burt

October 29, 2014

NY Attorney General Settles Investigation into Patent Troll

MPHJ employed a strategy of targeting small and medium-sized businesses, which in and of itself is not legally problematic. The fact that MPHJ acquired patents of dubious validity is interesting, but again, patents are presumed valid, so that is not terribly probative either. The problem with the MPHJ strategy is that it was deceptive. They sent out letters to a large number of small businesses in an effort to extract small, nuisance-value license payments from them. Indeed, some patent trolls seek far less than even a fair nuisance-value, asking for $500 or $1,000. It is this type of behavior that is the hallmark of a patent troll. The mere fact that one has acquired patents and seeks to license them is in and of itself irrelevant because that activity is completely legal. In the letters sent by MPHJ hundreds of New York businesses were told that it was “likely” that they were infringing MPHJ patents and, therefore, needed to take a patent license. By saying that they were “likely” infringing an impression was created that MPHJ had conducted at least some kind of individualized analysis of the targeted company’s business. But MPHJ did no investigation, choosing merely sent out form letters in bulk to companies of a certain size and industry classification.

Gene Quinn

January 14, 2014