A new front in the war to reform patent law could be unfolding. Eighteen members of Congress, led by Judy Chu (D-CA) and Blake Farenthold (R-TX), filed a letter with the FTC on Thursday asking the agency to use its Section 5 powers to prosecute patent trolls for unfair and deceptive business practices. In the letter, spotted by Adweek, the representatives argue that by threatening end users like consumers and small businesses with litigation, patent trolls are bilking them for quick settlements, forcing them to decide whether it’s worth it to chance an expensive court case.
MPHJ had been using more than 40 shell companies to threaten Vermont businesses
The letter points to a number of frivolous suits brought by trolls in recent years, including the well-publicized case of MPHJ Technology Investments in Vermont, in which the state’s attorney general filed suit against the company for "unfair and deceptive" business practices. Specifically, MPHJ had been using more than 40 shell companies to threaten Vermont businesses, claiming patent infringement damages for scanning and emailing documents.
The FTC has shown in the past that it’s prepared to go after what it sees as unfair use of patents, as in the Google (Motorola) FRAND case last year. Cracking down on trolls has been a hot topic in Washington of late, with President Obama announcing executive orders earlier this week that seek to protect companies and individuals from frivolous patent lawsuits.