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
