A batch of patents alleged to cover simple scan-to-e-mail functions gained notoriety last year when they were used to demand $1,000 per worker from small businesses around the country. The anonymously owned MPHJ Technology Investments has been denounced in Congress and held up as a poster child for a system run amok.
While eyebrow-raising patent claims have been on the rise for years, MPHJ's claims stood out. Attorneys general in Vermont and Nebraska have attacked MPHJ in court, saying the company's vague demand letters violate state consumer-protection laws.
After a year of threats, MPHJ filed its first actual lawsuit in November. Now, a batch of four new suits have been filed against three large companies and one medium-sized one. The defendants, all sued on January 3 in Delaware, are: the Coca-Cola Company (PDF); Dillard's (PDF), a department store that operates in 29 states and has about 38,000 employees; Unum Group (PDF), a Tennessee-based insurance company with over 10,000 workers; and Huhtamaki (PDF), a consumer goods and packaging company with 400 employees.
The complaints describe the IT infrastructure of each company, apparently based on publicly available information. In the case of Coca-Cola for instance, MPHJ says the company transmits "electronic images, graphics and/or documents via a communications network from a network addressable scanner, digital copier, or other multifunction peripheral," which allegedly infringes MPHJ's patents. Coca-Cola uses a "standardized infrastructure of Lexmark C772 color and T644 monochrome laser printers, as well as Lexmark X642e and X646dte MFPs, all connected to the company’s network and integrated with the company’s FileNet system," write MPHJ's lawyers, from the Farney Daniels law firm.
The four lawsuits are a major escalation in the battle over the MPHJ patents. They're remarkably long; the suit against Unum group is 47 pages, and the one against Huhtakami is 66 pages. In part, such detail about the nature of infringement suggests that MPHJ is responding to claims that its demands in the past have been too vague.
The lawsuits claim that two patents, numbered 8,488,173 and 7,477,410, are infringed because the companies use printer and other "multifunction peripherals," or MFPs, made by Xerox and Lexmark. The patents were issued in 2013 and 2009, respectively, but both claim priority back to applications filed in 1996.
The MPHJ patents were invented by Laurence Klein. According to MPHJ lawyers, Klein ran an IT company during that period, but it was ultimately unsuccessful so Klein sold his patents.
While companies like Xerox, Ricoh, Lexmark, and Hewlett-Packard remain at odds with MPHJ, others have apparently struck deals to protect their customers. The new complaints announce that MPHJ won't be going after users of printers or MFPs made by Canon and Sharp since those companies have struck agreements with MPHJ. The complaints read:
Canon, Inc. has entered into an agreement with MPHJ that includes certain provisions for the benefit of Canon customers. One provision is a covenant-not-to-sue for the benefit of any company otherwise infringing the Patents, which applies only where all of the scanners or MFPs that are part of any infringing system of that company are Canon Products. On information and belief, this provision is not applicable to Defendant.
Similar language applies to Sharp customers.
The MPHJ patent campaign has become one of the most reviled in the nation. "We consider this similar to garden-variety extortion," said Nebraska Attorney General Jon Bruning, at a US Senate hearing in which "patent trolls" like MPHJ were called "bottom feeders."
UPDATE: The original article incorrectly identified Nebraska Attorney General Jon Bruning as "Jim Bruning." Ars regrets the error and has corrected the original story.
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