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These letters contain an offer to license the patent for an amount that is significantly lessthan the fees and costs of litigation which on average are over $2 million through trial.NPEs often recite the list of well-known companies that have already taken licenses for thepatent from the NPE to encourage other companies to settle without significant delay thatcould increase the NPEs’ costs in extracting a settlement.Not surprisingly, NPEs try to reduce transactional costs in securing settlements and aremost often represented on a contingency basis by the law firms they hire to draft thedemand letters and file suits. Technical experts are sometimes hired on a contingencybasis as well.As the GAO study noted there is not “reliable data on patent assertion outside the courtsystem,” 18 therefore the full extent of payments by business to NPEs cannot be easilymeasured. The Electronic Frontier Foundation (EFF) and others are urging Congress torequire NPEs to report publically the cease and desist letters they send. 19 In the meantimethe EFF is collecting data from business that receive such letters and the information isavailable at https:/www.trollingeffects.org. Interestingly, the Federal Trade Commission(FTC) has taken on NPEs that send out cease and desist letters that contain deceptiverepresentations. Specifically, the FTC entered a settlement with MPHJ TechnologyInvestments, LLC which has contacted thousands of small businesses over its scannerpatents and alleged the businesses infringed the patents by scanning documents to e-18 Supra note 5.19 Julie Samuels, GAO Study Confirms the Obvious: Bad Patents Lead to Trolls, Electronic FrontierFoundation (Aug. 22, 2013) https://www.eff.org/deeplinks/2013/08/gao-study-confirms-obvious-badpatents-lead-trolls.10951932.2 8

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