FTC’s Motion to Dismiss MPHJ Technology’s Lawsuit Shot Down

Reports that U.S. District Judge Walter Smith Jr. has denied the U.S. Federal Trade Commission’s motion to dismiss a lawsuit filed against it by MPHJ Technology Investments. According to Judge Smith, he denied the motion to dismiss because it violated the U.S. District Court for the Western District of Texas’ local rules CV-7(d)(1) and (3), which limit dispositive motions, including accompanying documents, to a maximum of 20 pages.

The FTC’s motion and memorandum in support of its motion are two pages and 21 pages long respectively.

According to Law360, the ruling means MPHJ’s attempt to use the U.S. Constitution’s First Amendment to block the FTC’s investigation into MPHJ’s patent-enforcement activities will continue. MPHJ, which operates through a number of law firms, has become notorious over the last two years for seeking to enforce its scan patents. It’s sent out thousands of demand letters, typically to small businesses, and typically demanding $1,000 per employee for use of an MFP’s scanning capability.

In January 2014, MPHJ filed suit against the FTC, saying the agency mis-characterized its campaign to enforce its scan patents as an unfair trade practice, and interfered with its constitutional rights. It argues that it’s acting within its rights to free speech and intellectual-property ownership, and that the FTC overstepped its authority by threatening to file suit against it. MPHJ’s lawsuit also seeks a statement from the FTC acknowledging that the FTC was unlawfully interfering in a matter over which it had no jurisdiction, because the patent enforcement activity of MPHJ didn’t constitute the type of deceptive acts that the FTC has the power to regulate. In March 2014, the FTC filed a motion to dismiss MPHJ’s lawsuit.

MPHJ is represented by Steven R. Daniels and W. Bryan Farney of Farney Daniels PC and by Jim Dunnam of Dunnam & Dunnam LLP. The case is MPHJ Technology Investments LLC v. Federal Trade Commission, case number 6:14-cv-00011 before the U.S. District Court for the Western District of Texas.

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