Patent troll case to be heard in Vermont

Posted Wednesday, September 3, 2014 11:38 am

MONTPELIER -- An alleged patent troll has lost a motion to have the state's lawsuit against it dismissed.

MPHJ Technology Investments claims to hold a patent on the process of emailing scanned documents. The company sent numerous letters to Vermont businesses and nonprofits demanding payment of a licensing fee to MPHJ.

Attorney General Bill Sorrell filed suit in May 2013, alleging the letters were unfair, deceptive and in violation of the state's consumer protection laws. In court documents, the state alleges that the letters numbered in the "hundreds of thousands."

MPHJ tried twice to move the case to federal court, but twice was denied. The company then filed a motion to dismiss the case from the civil division of Vermont Superior Court's Washington Unit, claiming lack of jurisdiction. That motion was denied by Judge Helen Toor last week.

"The State has a special interest in protecting its citizens, which is categorically different from an individual business suing to protect solely its own interests," Toor wrote in her decision.

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"Vermont has a strong interest in protecting its citizens from consumer fraud. Moreover, rejecting jurisdiction would be unfair to those alleged to have been subjected to the deceptive letters," Toor said.

MPHJ, a Delaware company, argued that it would be burdensome to defend the litigation in Vermont. However, the company's own demand letters had threatened litigation in Vermont - a point Toor underscored in her decision to hear the case.

"In addition, it would be more burdensome for the 'hundreds or thousands' of recipients of the letters to provide evidence in Delaware than it would for MPHJ's witnesses, presumably a limited group, to provide evidence here," she wrote.

The suit is also brought on the basis of Vermont's state-specific consumer protection laws. While many other states hold similar statutes, Toor said it is unlikely courts in other states would claim jurisdiction for the case.

The parties are expected to submit proposed discovery or pretrial orders by Sept. 15. Discovery is to be completed by May 28.