Been trolled recently?

A “patent troll” – sometimes called a “non-practicing entity” or “NPE” – is a company that tries to enforce patents against alleged infringers in a very aggressive manner. In many instances they have no intent to manufacture or market the patented product or service, but use legal action to block others or to make money from claimed infringements.

Real estate has seen its share of alleged patent trolls over the years, and another may be on the horizon. NAR recently reported that members in several states have received demand letters from companies seeking payments of $900 – $1200 for allegedly violating a patent on the process of scanning a document and sending it via email. The company – MPHJ Technology, sending letters through several subsidiary corporations – apparently hopes to scare individuals or small firms into just paying the proposed license fee without a fight, even though they don’t appear to have proof of any specific violations when they send the letter.

So what should you do if you get a letter from MHPJ or one of its subsidiaries? Of course the first and most important step is to consult with your attorney and/or brokerage counsel. Regardless of what you end up doing, you should at least discuss the possible repercussions with counsel before taking action.

NAR provides a number of possible outcomes in an article and podcast from June, 2013. One option is to simply pay the fee demanded in the letter. At other end of the spectrum, you could consider engaging in your own legal action. For example, you might challenge the validity of the patent or ask for a review that might invalidate it. In between those extremes, you might try to engage the company in a dialogue about the alleged violation, or simply ignore the demand letter. To date, NAR is not aware of any actions that have been filed against alleged violators.

Have any PAR members received letters like these?  If you have, please let us know in the comments or send information to me directly at [email protected].