Commissioners Approve First FTC Action Against PAE

The FTC approved 5-0 a settlement with MPHJ Technology Investments and its law firm Farney Daniels that was announced in November (see 1411130057), an agency news release said Tuesday. The FTC lawsuit alleged MPHJ and Farney Daniels “bought patents relating to network computer scanning technology, and then told thousands of small businesses that they were likely violating the patents and should purchase a license,” the commission said. MPHJ and Farney Daniels used “deceptive sales claims and phony legal threats in letters” to accuse “thousands of small businesses around the United States of patent infringement,” the release said. The case marks the first time the FTC has taken action using its consumer protection authority against a patent assertion entity, the agency said. The order bars MPHJ, Farney Daniels and MPHJ owner Jay Mac Rust from asserting patent rights, making false or unsubstantiated representations that a patent has been licensed in substantial numbers or has been licensed at particular prices, the FTC said.