FTC Cracks Down On PAE's

Says Company Issued Deceptive Letters, Made Bogus Legal Threats

The Federal Trade Commission has used for the first time its consumer protection powers to prevent bogus legal threats by Patent Assertion Entities (PAE's), sending a signal to patent trolls that the failure of House-passed patent troll legislation to make it through the Senate (at least so far) is no shield from the long arm of the government.

In a settlement with the agency, MPHJ Technology Investments and its law firm are barred from making "deceptive representations" when asserting a patent right. 

So-called patent trolls attempt to make money by asserting claims widely against businesses or individuals that may or may not be using a patented technology and then collecting from those under threat of litigation.

"Patents can promote innovation, but a patent is not a license to engage in deception," said Jessica Rich, director of the FTC's Bureau of Consumer Protection, in announcing the action. "Small businesses and other consumers have the right to expect truthful communications from those who market patent rights."

Read more at B&C here.