September 29, 2022

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U.S. Federal Trade Commission Settles First Ever Enforcement Action Against Patent Troll And Its Lawyers

On November 6, 2014, the FTC announced a consent order settling charges that patent assertion entity MPHJ Technology Investments, LLC and its law firm used deceptive sales claims and phony legal threats.  According the FTC’s complaint, MPHJ and its lawyers sent letters with misrepresentations to thousands of small businesses across the United States, accusing them of infringing MPHJ’s alleged patents relating to network computer scanning technology.  The letters, which included an infringement complaint formatted for the local federal district court, told recipients to purchase a patent license from MPHJ or face legal action.  According to the FTC, MPHJ did not file any such patent infringement suits and also falsely represented in the letters that many other companies had already agreed to pay thousands of dollars for MPHJ licenses.  Under the consent order, MPHJ and its lawyers agreed to refrain from making deceptive representations when asserting patent rights—such as false or unsubstantiated statements that a patent has been licensed in substantial numbers, that a patent has been licensed at particular prices, or that a lawsuit will be or has been filed.  Future deceptive conduct would trigger penalties of up to $16,000 per letter.  This settlement marks the first time the FTC has taken action against a patent troll using its consumer protection authority.   

© 2022 Honigman Miller Schwartz and Cohn LLP National Law Review, Volume IV, Number 334

About this Author

William Berndt  Honigman Miller trade secrets false advertising trade secret law

 Mr. Berndt is a trial lawyer with substantial experience in state and federal courts across the country. He focuses his practice on trade secret and false advertising claims. He represents businesses and senior executives in disputes relating to noncompetition agreements, trademark and copyright, fraud, professional liability, internal investigations, and general business and commercial litigation. Mr. Berndt has first-chair experience in trials, arbitrations and other proceedings.

  • Litigates requests for emergency relief such as temporary...
David L. De Bruin appellate attorney patent litigation USPTO Honigman Chicago
Of Counsel

Mr. De Bruin is a seasoned first-chair trial and appellate attorney. He concentrates his practice on patent litigation and related proceedings before the United States Patent and Trademark Office. Mr. De Bruin successfully argues legal issues, as well as explain the most complex technology to judges and juries.

  • Tries patent cases in a variety of venues before judges and juries and has successfully argued numerous patent cases before the Federal Circuit Court of Appeals
  • Represents clients in a wide array of technology ranging from mechanical and electrical devices...
Marcus D. Fruchter lawyer Honigman Chicago office litigation specialist

Mr. Fruchter defends or initiates litigation when it is inevitable and avoids lawsuits where possible. He provides zealous and creative representation that protects his clients’ legal rights and advances their strategic objectives. Mr. Fruchter litigates in state and federal courts across the country, and he has handled matters involving international and cross-border issues.

  • Resolves disputes for clients in a variety of areas, including intellectual property, commercial fraud, securities investigations, contract interpretation and enforcement, and professional malpractice...
Nicholas A. Gowen Honigman Chicago complex commercial litigation attorney t

Mr. Gowen represents companies, individuals and law firms in disputes, including those involving intellectual property, trade secrets, unfair competition, employment matters and other business litigation matters. He approaches litigation with an eye toward results; understanding that advancing his clients’ litigation strategies should fit within their overall business interests.

  • Counsels businesses on ways to avoid litigation and resolve disputes using alternative measures
  • Authors articles on various business litigation topics
Steven A Weiss Litigation attorney Honigman Law firm Chicago ediscovery
Leader, Complex Commercial Litigation Practice Group

Mr. Weiss provides advice on a wide variety of business litigation for companies and business people. He is focused on resolving business disputes with particular experience handling intellectual property, breach of contract, trade secret, employment and covenant not to compete matters. Local and national companies and individuals retain Mr. Weiss to handle a full range of business disputes because they trust his judgment and litigation skills.

  • Provides cost-effective representation that achieves results - either through settlement...