U.S. Patent & Trademark Office. (Photo: Diego M. Radzinschi/NLJ)
The notorious patent troll MPHJ Technology Investments will have to defend the validity of two of its patents before the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board, which ruled Monday that there is a “reasonable likelihood” that it may find the patents invalid.
The three-judge panel issued its decision exactly five months after Xerox Corp., Ricoh Americas Corp. and Lexmark International Inc. jointly filed petitions for a review of the two patents, which cover a virtual copier technology often described as “scan-to-email.” The three companies, represented by Michael Specht of Sterne, Kessler, Goldstein & Fox, have said they want to protect their customers and dealers, whom MPHJ has targeted for alleged patent infringement.
Neither Specht nor MPHJ’s counsel—Scott Horstemeyer of the Atlanta IP firm Thomas|Horstemeyer—could be reached for comment.
The PTAB panel will conduct a so-called inter partes review, which is one of the relatively new methods authorized in the America Invents Act of 2011 to challenge patents after they’ve been issued. The PTAB conducts a minitrial to determine whether a patent’s claims should be invalidated. The PTAB venue has proven to be popular and is now the second-busiest patent docket after the Eastern District of Texas.
Monday’s filings mark the second time these companies have challenged MPHJ’s patents at the PTO. In May 2013, Ricoh and Xerox filed a petition to invalidate another patent that MPHJ has aggressively asserted against their customers. In addition, Hewlett-Packard Co. sought to invalidate several of MPHJ’s patents in May 2013, citing prior art. Oral arguments in those cases took place last week before a PTAB panel.
MPHJ has come to epitomize the typical patent troll, whose business model is based on acquiring patents and asserting them against companies that will pay licensing fees rather than pay the high cost of litigation. It has sent thousands of demand letters to small companies, threatening to sue them for patent infringement if they don’t pay a licensing fee for using the scan-to-email technology. The company is under investigation by the Federal Trade Commission and has been sued by the state of Vermont.
In fiscal 2013, the first year of the new postgrant review program, the PTAB granted a large percentage of the inter partes reviews filed by petitioners. But this year the PTAB has been denying more. As of Aug. 21, the board has denied IPR trials in about one-third of the cases filed in fiscal 2014.