Patent Trolls Threatening to Sue AGC Members

Across the country, “patent trolls” are threatening to sue AGC members for making use of any “system” for scanning documents and then emailing the resulting files to employees or others.  In letters sent to at least 16 members, including six in Missouri, these folks have demanded a licensing fee for making use of any such “system,” and they have threatened litigation for patent infringement unless the contractor agrees to pay. To the best of our knowledge, these patent trolls have yet to make good on any of their threats to take legal action against AGC members.  In fact, a few contractors report that – either alone or through their lawyers – they have persuaded the trolls to back down.  On the other hand, the patents are “legitimate,” in the sense that they are actually registered with the U.S. Patent and Trademark Office (PTO).  Whether the patents are valid, or as broad as the letters allege, are entirely open questions, but the patents do exist.  And by all accounts, the cost of proving they are invalid could be quite high. For these reasons, the lawyers advising AGC members are typically reluctant to recommend that their clients simply ignore the letters.  Indeed, AGC of America has detected a consensus on only three things:  contractors should never concede that the patents are valid, that the troll has accurately described them or that the contractor has infringed on them -- whatever their scope may be. According to the PTO, these trolls did sue 3 companies in early 2012 but various articles reveal that they withdrew their complaints before the courts could make any decisions.  What may be more noteworthy is that another two other cases are currently pending against the trolls.  One is a preemptive strike that a small engineering company has brought against them, seeking damages for misrepresentation, and a declaration that the patents are invalid.  The other is a case that the State of Vermont has brought against the trolls, alleging unfair and deceptive acts in violation of Vermont’s Consumer Protection Act. If you have a problem, AGC of America can provide you with the copies of the complaints filed in those two cases, and contact information for the lawyers handling them.  The national organization can also send you links to various articles on the Internet.  Just contact Mike Kennedy, the General Counsel for AGC of America, at 703-837-5335 or kennedym@agc.org. The national organization might also suggest that you contract the state’s Attorney General and/or its consumer protection agency.