NEW YORK (AP) — State Attorney General Eric Schneiderman announced Tuesday that a settlement had been reached with a company he said used "deceptive and abusive tactics" in dealing with New York businesses over patents.
Schneiderman announced the agreement with Delaware-based MPHJ Technology Investments, a company he accused of engaging in "patent trolling." That's when a firm makes claims of patent infringement by other companies in the aim of getting license fees or settlement money.
"State law enforcement can't cure all the ills of the federal patent system, but the guidelines established in today's settlement will put an end to some of the most abusive tactics by placing the industry on notice that these deceptive practices will not be tolerated in New York," Schneiderman said.
He said MPHJ sent letters to more than 1,000 New York businesses from September 2012 to May 2013 over claims of patent infringement concerning some computer technology. Those letters included ones seeking to get license payments and threatening legal action.
The settlement imposes conditions on MPHJ, including making sure a targeted business is actually infringing on a patent before sending a letter and thoroughly explaining the basis of any claim that a patent is being infringed upon.
The settlement also requires MPHJ to let any company that got a letter and paid a license fee to void that license and get its money back.
In a statement, MPHJ said it believed it had been operating within applicable law, but "it considers the guidelines proposed by the NY AG to be reasonable and believes this agreement is an acceptable resolution of the issue."