Vermont Business Magazine MPHJ Technology Investments, LLC, lost its latest attempt to avoid litigating its case in Vermont state court when the United States Appellate Court for the Federal Circuitdismissedan appeal of the federal district court’s decision to send the case back to the state court for resolution. “We’re pleased the Federal Circuit has rejected MPHJ’s appeal. Now we can turn in earnest to litigate the case in state court – where it began and where it rightfully should be,” said Attorney General Sorrell.
In May 2013, Attorney General William Sorrell brought a lawsuit in state court against MPHJ, which claimed to have a patent on the process of scanning documents and attaching them to email via a network. The Attorney General alleged that MPHJ sent unfair and deceptive demand letters to businesses and non-profits throughout Vermont. MPHJ removed the case to federal court, which remanded it back to state court in April 2014 due to lack of subject matter jurisdiction. MPHJ appealed that decision and raised other issues, all of which were dismissed by the Federal Circuit.
Patent troll opponents suffered a setback this past May when the Democratic leadership in the Senate, over Senator Patrick Leahy's (D-Vermont) objection, dropped legislation that would have restricted the opportunity for so-called patent trolls to threaten firms with "frivolous" patent infringement. However, the Vermont victory could give states another strategy in their battle against patent trolls.
In analyzing the ruling, Walter Judge, Director of the Litigation Group at Downs Rachlin Martin PLLC in Burlington, said: "Judge Sessions of the Vermont federal court ruled, over MPHJ's strenuous objection, that this case did not belong in federal court because it was not fundamentally about the validity of MPHJ's patents. MPHJ appealed to the Federal Circuit. In dismissing MPHJ’s appeal, the Federal Circuit made a straightforward decision that, under a clear federal statute (28 U.S.C. § 1447), federal appeals courts are without jurisdiction to review a lower court remand order. Once a lower federal court decides that the federal court system does not have jurisdiction over a case, and remands the case back to state court, a federal appeals court likewise does not have jurisdiction to review the lower court’s decision. The case is now back in superior court in Montpelier.
"This legal development could have national implications for state efforts to challenge alleged patent trolls. Through the combination of Judge Sessions’ remand decision and the ensuing Federal Circuit decision that the remand order cannot be appealed, state attorneys general across the country might now feel that they have a free hand to sue alleged patent trolls in the favorable environment of their state courts, and keep the case there. For this reason, MPHJ might try to appeal the Federal Circuit’s decision."
RELATED: Patent reform bill dealt fatal blow in Senate
Source: VAG 8.12.2015