Patent Law

Nebraska AG goes after alleged patent trolls

Nebraska attorney general Jon Bruning, who was sued for violating a business’ right to choice of counsel after accusing Texas law firm Farney Daniels of copyright trolling, recently filed a response.

It argues that many Farney Daniels clients don’t practice technologies covered by their patents, the Washington Post reports.

Although Farney Daniels sent several cease-and-desist letters to Nebraska entities, it has no intention of suing those entities, Bruning’s motion-to-dismiss filing (PDF) argues, and that violates state law prohibiting unfair business practices.

“The very nature of Farney Daniel’s wide patent solicitation campaign depends on filing suit rarely, if ever,” the Nebraska federal court filing states. “Lawsuits risk the invalidity of the patent, which would collapse the entire scheme. Rather, Farney Daniels has a strong incentive not to sue, and if they do sue, not to serve summons or otherwise prosecute the case fully, always giving it the option of dismissing a complaint.”

Farney Daniels represents Activision TV, according to Techdirt. Techdirt reports that Activision TV has been using patents related to digital displays to demand license fees from companies.

According to the Washington Post, Bruning does not have a “quarrel” with Activision TV. Instead, he’s concerned about the action of MPHJ Technology Investments, another Farney Daniels’ client. In Bruning’s cease-and-desist letter (PDF) to Farney Daniels, sent in July, he stated that the patent-infringement allegations were made by “non-practicing entities with regard to the vast majority of the patents in question.”

In May, Vermont sued MPHJ Technology Investments for patent trolling, ARS Technica reported. According to a prior article hundreds of businesses have received demand letters from various patent-holding companies. The letters state that using office equipment–like scanners that send email files–violates patents owned by MPHJ Technologies. Usually, the article states, the letters demand payment of $9,000, or be faced with legal action.

In response to Bruning’s recent allegations, Farney Daniels’ lawyer Brett Johnson told the Washington Post that the letters sent were “lawful and appropriate.”

Client MPHJ can’t tell if a business has infringed on its patents based on public information, Johnson reportedly said, and “the letters are needed to confirm that a suspected infringer actually does infringe.”

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