In an early test of state laws that attempt to curb patent trolls, a Vermont federal judge has allowed a challenge to proceed against Vermont’s Bad Faith Assertions of Patent Infringement Act, even though the state has not sued the plaintiff under that law. The challenge is being closely watched, as 23 other states have followed Vermont’s lead and passed similar laws that attempt to restrain patent trolls.
The plaintiff in this case is a nonpracticing entity called MPHJ, which sent hundreds of demand letters to Vermont companies and nonprofits alleging infringement of a “scan-to-email” patent and demanding licensing fees. In May 2013 the state sued MPHJ in state court under the Vermont Consumer Protection Act. In Vermont, businesses are considered consumers.
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