On Nov. 6, 2014, the U.S. Federal Trade Commission settled its first action against a patent assertion entity. The FTC alleged that MPHJ Technology Investments LLC and its law firm had sent more than 16,000 letters to small businesses throughout the United States asserting that they were infringing its patents for scanning documents to email and that MPHJ would institute litigation unless the letter recipients agreed to pay MPHJ a royalty. The FTC alleged that the mass letters were misleading and therefore actionable under Section 5 of the FTC Act, because, among other things, MPHJ did not have an intention of actually filing patent infringement suits. MPHJ maintains that it always intended to bring suits, but only decided not to after the validity of its patents was challenged in America Invents Act proceedings. Under the settlement, MPHJ agreed to refrain from making certain deceptive representations when asserting its patent rights. A copy of the agreement containing consent order is available here.
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