18 March 2015Patents

FTC approves final settlement with licensing company

The US Federal Trade Commission has approved a final settlement in its dispute with licensing company MPHJ Technologies that prevents the company from sending deceptive legal threats.

Approved on Friday (March 13), the settlement means that MPHJ will also have to provide a copy of any letters it sends to companies requesting a licensing fee for technology covered by its patents.

The order will be in effect until March 13, 2035.

As part of the settlement, MPHJ is also prevented from falsely misleading companies about the number of companies that have paid licensing fees for its patents.

It will also not be allowed to falsely state that a lawsuit will be filed unless “competent and reliable” evidence is submitted to the FTC about the alleged infringing party and its intention to follow through on its threats.

The dispute centres on the claim made by the FTC in 2013 that MPHJ and the law firm representing it, Farney Daniels, were in breach of section 5 of the FTC Act.

Section 5 of the act forbids companies from using “deceptive acts or practices” to unfairly affect commerce.

The FTC stated that MPHJ had sent more than 9,000 letters to companies it claimed were infringing five patents covering computer scanning technology and told the accused companies to purchase patents from it in order to avoid legal action.

The FTC said MPHJ had falsely claimed that many companies had agreed to pay it licensing fees for the use of patents it owns in order to avoid legal action.

MPHJ could not be reached for comment.

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