Meet the owner of the "$1 patent portfolio" used to shake down businesses that own scanners

Patent troll "MPHJ" has been exposed at length in recent reports. Today, Ars Technica takes a look at the firm's latest move: suing the federal government.

The new lawsuit (PDF) also reveals how MPHJ organized its 101 subsidiary LLCs, which all have bizarre six-letter names like GosNel and IntPar. It discloses how many targets MPHJ found and how they were chosen. And the final exhibit—the FTC's draft complaint, which was on the verge of being filed—reveals the mystery of who actually owns MPHJ.

The company's sole member is Jay Mac Rust, a Texas lawyer with a trail of troubled cases, including one where he was accused of running a "Ponzi scheme." Last year, Ars was provided with a recording of one of Rust's enforcement calls. "99 percent of people are using it," said Rust about the MPHJ patents at that time. "You know it and I know it."

MPHJ reportedly acquired its IP portfolio for a single dollar in 2012. But it is nonetheless "something of an innovator", adds Klint Finley for Wired: "Instead of suing large tech outfits, it goes after small businesses. But these brazen attempts to make money from outfits with tiny legal budgets has attracted both state and federal government agencies."

I don't buy the idea that this guy is the "World's Most Innovative Patent Troll" just because he goes after small guys and has preemptively sued the government. The trick is so simple (it's cheaper to just pay him off than to hire a lawyer) that small-time swindlers were bound to catch on sooner or later. What this troll is doing—targeting normal people and making a big show of insolence and outrage—is just what small-time swindlers do.