Patent Trolls Demanding $1,000/Employee From Businesses That Dare To Use A Scanner

Sick of going up against huge companies that have teams of experienced lawyers at their disposal, patent trolls are apparently turning to smaller companies and demanding bizarre royalty payments simply for using basic office technology on which the trolls claim they have the patent.

Ars Technica brings us the story of Project Paperless LLC, one of many names used by the supposed owners of patents on technology that involves using a scanner for the purpose of e-mailing the scanned document. Rather than make claims against Xerox, Canon, HP, and Brother and hoping for seven- or eight-figure payouts, it is instead writing many small to mid-size businesses to demand a license fee for the use of this sort of tech in their everyday operations.

The owner of an Atlanta business that received one of these letters tells Ars that he immediately contacted the lawyer for the patent troll and was politely told, “if you hook up a scanner and e-mail a PDF document—we have a patent that covers that as a process.”

Unlike some companies that simply paid the licensing fee, which ranged anywhere from $900 to $1,200 per employee, this business-owner decided to stand his ground.

“My lawyer said, even if you win, this case will cost a million dollars,” he recalls. “I said, I don’t think it will—but I’d rather pay a million than pay these guys $200,000.”

So he hired a new lawyer, who filed a third-party complaint involving the big businesses named above, effectively forcing them to become involved in the litigation. But it never got to that point, as Project Paperless dropped its suit before it could get to court — and before the lawyers for these titans of tech were brought into the fray.

But Ars reports that the Project Paperless patents have now been handed off to what appears to be a network of at least eight different shell companies, each sending out virtually identical letters to small and medium-sized businesses.

Here is a copy of one such letter:

Ars found research claiming that claims against smaller companies now make up a majority of lawsuits by patent trolls in the U.S.

“Going after the end users may ultimately be more lucrative for them,” one patent lawyer explains. “If they extract a small amount from each possible end user, the total amount might well end up being a much larger sum than they could ever get from the manufacturers. The ultimate pot of gold could end up being much bigger.”