It’s a story you couldn’t make up. Five months ago I wrote about the relentless decline of Neomedia, the only publicly quoted company in the QR Code space. Since then their stock price has fallen by a further 90% but they have stepped up their activity as a patent troll.
Companies such as Taco Bell, Bed Bath & Beyond, Wendy’s and a few others are all in the process of being sued by Neomedia for Patent Infringement. In essence Neomedia’s case is that these companies “By making and/or using QR Codes that indirectly link to a webserver” are infringing US Patent 6,199,048 “System and method for automatic access of a remote computer over a network” and US Patent 8,131,597 “System and method for using an ordinary article of commerce to access a remote computer”.
Last week Neomedia sued North America’s largest arts and crafts specialty retailer Michaels Stores but the action has a novel twist. Here are paragraphs 22 and 23 of Neomedia’s submission/evidence which has the image (including the bubble) on the left:
22. QR Code advertisements and/or product packaging used by Michaels are examples of machine-readable codes that enable a user device to connect with a content server over the Internet by scanning a machine-readable code encoded with an index that is sent to a server and used to lookup the URL of the content server, which is then returned to the user device to enable it to connect with the content server.
23. As one example, the following QR Code enables a user device to communicate the index to the server “http://goo.gl” to obtain the URL “http://m.youtube.com/#/watch?v=Qtg9U3IVaCA&desktop_uri=%2Fwatch%3Fv%3DQtg9U3IVaCA” of the content server.
This is a mistake because the URL in the image actually resolves to http://www.youtube.com/watch?v=Qtg9U3lVaCA but the QR Code is indeed encoded with a Google short URL http://goo.gl/wnhYS. It is of course the short URL that is being claimed by Neomedia to be the “indirect link”. So it would appear that if you use a Google short URL in a QR Code you are, as far as Neomedia is concerned, infringing their patents. In fact you don’t even need to use your own server, in this case the shortener and the video both reside on Google servers.
Google actively encourages the use of their short URLs in QR Codes by generating one for you each time you use the service. Maybe Michaels Stores should sue Google for not warning them that by using this service they were in potential violation of two patents
Joking aside it would be interesting to see Google become a party to this action because they have the resources to defend Neomedia’s claims. In my opinion (but I am not a lawyer) and the opinion of others in the business, Neomedia’s claims are unlikely to be successful when fully tested in a court of law. SpyderLynk was similarly sued by Neomedia last year but a settlement was reached when SpyderLynk agreed to licence the patents. Nicole Skogg, founder and CEO of SpyderLynk was quoted as saying that the her company doesn’t believe it infringed Neomedia’s patents but the cost of defending itself in court would have far exceeded the cost of licensing the technology.
I had a few other thoughts while writing this post. The action was filed last week but the ad produced in evidence was for Valentine’s Day 2011 a full 2 years and 4 months previously, which seems a large gap before deciding to go to court. Also the image with the bubble, produced in evidence, was created by Courtney Engle on Apr 15, 2011 and I wonder if Neomedia asked his permission to reproduce it. Lastly, presumably Neomedia believes that using not only goo.gl but TinyURL, bitly or any other shortener in a QR Code infringes their patents.