January 14, 2014 | By Julie Samuels

It's a Bad Week to be a Patent Troll: Big Updates from New York and Newegg

Patent trolls are having a bad week. Today the New York Attorney General announced it had reached a settlement with MPHJ, the so-called scanner troll. That deal, not entirely unlike the one already in place in Minnesota, is great news for New Yorkers who have found themselves facing the notorious patent troll as well as anyone planning to do business in the Empire State. The settlement itself requires that the scanner troll actually investigate before it sends threatening demand letters and prohibits it from bothering businesses it has already contacted. Even better, the settlement allows those who've already taken a license from MPHJ to get a refund.

The actual settlement document itself is quite an interesting read—it lays out in some detail just how shady MPHJ really is. For instance, MPHJ sent more than 1,000 demand letters to New Yorkers alone (which means it must have sent at least tens of thousands of letters nationwide!) and more than 300 draft complaints despite the fact that it has never sued anyone in that state.

New York's Attorney General deserves credit for protecting its state's businesses and creators by shutting down one of the worst patent trolls. It joins not only Minnesota, but Vermont and Nebraska in targeting this particularly bad actor.

Another anti-patent troll crusader, Newegg, is also having a good week. Yesterday, the Supreme Court refused to hear a case about the "shopping cart" patent, leaving undisturbed a lower court ruling invalidating that pernicious patent. The shopping cart patent is a good example of what happens when low-quality patents end up in the hands of bad actors—Soverain, the patent's owner, has reportedly made more than $70 million in settlements and lawsuits claiming it owns basic, obvious shopping cart technology. That's $70 million that is not hiring new employees, growing businesses (other than the troll's!), or engaging in important research and development.

News of New York's settlement and Newegg's victory put even more pressure on the patent troll business model. When taken with momentum on the Hill to pass legislation and increased attention from the Supreme Court, we're getting closer and closer to the days when patent trolls and poor-quality patents get out of the way of innovation. It can't come soon enough.


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