Scanbuy v Neomedia

Successive CEOs and senior management have transformed Neomedia into a bankrupt pile of garbage and exploited hapless shareholders in the process. Over the last few years with no viable business plan Neomedia has adopted the role of patent troll in the QR Code space and recently, as a last throw of the dice, is embarking on legal action against a successful competitor, Scanbuy.

I contacted Scanbuy and not surprisingly they declined to comment on any pending litigation or any particular company. However they did offer a synopsis of some current legal proceedings per the public filings. It makes interesting reading:

As the world’s leading mobile engagement solutions provider, Scanbuy hopes to give brands peace of mind so they can focus on growing their business and take advantage of QR Codes to engage their customers without worry of ongoing patent threats. Scanbuy has one of the largest and oldest patent portfolios of any company in the industry, owning 19 patents globally and licensing more than 40 patents to cover its entire solution. Scanbuy uses this unequalled position to protect its customers and has never used its patents for assertive purposes, defense only.

On May 7, NeoMedia Technologies filed a lawsuit against Scanbuy in the federal court located in Atlanta alleging, among other things, trademark infringement and patent infringement. NeoMedia filed its lawsuit just a few weeks after Scanbuy filed a lawsuit against NeoMedia in a state court in Delaware. Scanbuy’s lawsuit alleges that NeoMedia violated Delaware law by interfering with Scanbuy’s business relationships and expected business relationships by sending false and misleading letters to Scanbuy’s customers threatening them with patent infringement if those customers do not take a license from NeoMedia.
Scanbuy’s complaint says that NeoMedia sent threatening letters to numerous leading corporations including Canon, Inc., Campbell Soup Company, W. Atlee Burpee & Co., Bissell Inc., Starbucks Corp., and The Home Depot. NeoMedia’s threats included that “the use of indirect codes by Scanbuy and Scanbuy’s customers infringes” certain patents owned by NeoMedia.

Among other things, Scanbuy’s complaint alleges that NeoMedia knew or should have known that Scanbuy, and therefore Scanbuy’s customers, are free to use NeoMedia patents – some of which have about a year of life left–because of certain agreements (described below) between and among Scanbuy, NeoMedia, and Microsoft.

As is publicly known, Scanbuy and Microsoft entered into an agreement, announced in August 2013, by which Scanbuy began directly supporting Microsoft’s “TAG technology” and which also made Scanbuy a “customer” of Microsoft. Prior to that, NeoMedia had granted Microsoft a patent license that covers Microsoft, its customers, and their customers’ customers. Therefore, Scanbuy alleges in its Delaware lawsuit that NeoMedia made false and misleading statements about Scanbuy and the reach of NeoMedia’s patents because Scanbuy and its customers are covered under the NeoMedia-Microsoft license.

NeoMedia’s threat letters offer a proposed solution to Scanbuy’s customers: if the companies wish to continue to use QR codes, the company can enter a license agreement directly with NeoMedia. However, as stated, Scanbuy believes that Scanbuy and Scanbuy’s customers do not need a license from NeoMedia to operate.

Also, Scanbuy notes that at least one company decided not to pay NeoMedia for a license, but instead, it will fight by questioning the validity and alleged infringement of NeoMedia’s patents. For example, Starbucks filed a declaratory judgment action in the United States District Court for the Western District of Washington (Civil Action No. 2:14-cv-00365) on March 12 seeking a declaration that Starbucks does not infringe U.S. Patent No. 8,131,597 and that U.S. Patent No. 8,131,597 is invalid.

A quick non-exhaustive search of docket filings shows that NeoMedia has filed nine lawsuits in the past 12 months alone. The full list of 23 scannable code patent lawsuits filed by NeoMedia in all previous years is included in the addendum below.

In contrast, Marshall Feature Recognition (MFR), the largest and most significant scannable code patent holder, has not filed suit against any of Scanbuy’s customers. Scanbuy’s own patents and its agreements with MFR and others in the industry ensure Scanbuy’s customers are protected from patent lawsuits when they create QR Code campaigns.

The list of MFR’s scannable code patent lawsuits include:

• Mondelez
• Wendy’s
• Pepsi Frito Lay
• Anheuser Busch
• CVS
• Heinz
• Target
• Toni&Guy
• Valpak
• Wrigley
• Cheesecake Factory
• Darden (Olive Garden)
• Dicks Sporting Goods
• KitchenAid

Addendum – List of NeoMedia Patent Lawsuits

1. NEOMEDIA TECH INC V. AIRCLIC INC, ET AL
January 23, 2004 IL U.S. DIST. CT., NORTH 1:04-CV-00566 INTELLECTUAL PROPERTY, PATENT

2. NEOMEDIA TECH INC V. DIGITAL CONV CORP, ET AL
June 26, 2001 TX U.S. DIST. CT., NORTH 3:01-CV-01232 CONTRACTS, NEGOTIABLE INSTRUMENT

3. NEOMEDIA TECH INC V. VIRGIN ENTERTAINMENT, ET AL
January 02, 2004 IL U.S. DIST. CT., NORTH 1:04-CV-00021 INTELLECTUAL PROPERTY, PATENT

4. NEOMEDIA TECHNOLOGIES I v. STUART SMITH
February 25, 1998 FL PALM BEACH 15TH JUDICIAL CIR. 1998CA001771 REMEDIES, REPLEVIN

5. NEOMEDIA TECHNOLOGIES, INC. V. AIRCLIC INC.
April 20, 2004 PA U.S. DIST. CT., EAST 2:04-CV-01704 INTELLECTUAL PROPERTY, PATENT

6. NEOMEDIA TECHNOLOGIES, INC. V. BED BATH & BEYOND, INC.
May 01, 2013 CO U.S. DIST. CT. 1:13-CV-01152 INTELLECTUAL PROPERTY, PATENT

7. NEOMEDIA TECHNOLOGIES, INC. V. CONAIR CORP.
May 03, 2013 CO U.S. DIST. CT. 1:13-CV-01177 INTELLECTUAL PROPERTY, PATENT

8. NEOMEDIA TECHNOLOGIES, INC. V. COSTCO WHOLESALE CORPORATION
April 28, 2014 CO U.S. DIST. CT. 1:14-CV-01189 INTELLECTUAL PROPERTY, PATENT

9. NEOMEDIA TECHNOLOGIES, INC. V. DUNKIN’ BRANDS GROUP, INC.
September 03, 2013 CO U.S. DIST. CT. 1:13-CV-02351 INTELLECTUAL PROPERTY, PATENT

10. NEOMEDIA TECHNOLOGIES, INC. V. KAO USA, INC.
April 02, 2013 CO U.S. DIST. CT. 1:13-CV-00848 INTELLECTUAL PROPERTY, PATENT

11. NEOMEDIA TECHNOLOGIES, INC. V. KAO USA, INC.
April 02, 2013 CO U.S. DIST. CT. 1:13-CV-00850 INTELLECTUAL PROPERTY, PATENT

12. NEOMEDIA TECHNOLOGIES, INC. V. LSCAN TECHNOLOGIES INC.
May 26, 2004 PA U.S. DIST. CT., EAST 2:04-CV-02307 INTELLECTUAL PROPERTY, PATENT

13. NEOMEDIA TECHNOLOGIES, INC. V. MICHAELS STORES, INC.
June 13, 2013 CO U.S. DIST. CT. 1:13-CV-01521 INTELLECTUAL PROPERTY, PATENT

14. NEOMEDIA TECHNOLOGIES, INC. V. RE/MAX LLC
April 11, 2013 CO U.S. DIST. CT. 1:13-CV-00934 INTELLECTUAL PROPERTY, PATENT

15. NEOMEDIA TECHNOLOGIES, INC. V. SCANBUY INC.
April 20, 2004 NY U.S. DIST. CT., SOUTH 1:04-CV-03026 INTELLECTUAL PROPERTY, PATENT

16. NEOMEDIA TECHNOLOGIES, INC. V. SCANBUY INC.
April 20, 2004 NY U.S. DIST. CT., SOUTH 2:04-CV-03026 INTELLECTUAL PROPERTY, PATENT

17. NEOMEDIA TECHNOLOGIES, INC. V. SCANBUY, INC.
May 07, 2014 GA U.S. DIST. CT., NORTH 1:14-CV-01379 INTELLECTUAL PROPERTY, PATENT

18. NEOMEDIA TECHNOLOGIES, INC. V. SCANBUY, INC.
September 11, 2013 NY U.S. DIST. CT., SOUTH 1:13-CV-06385 OTHER FEDERAL STATUTES, OTHER FEDERAL STATUTORY ACTIONS

19. NEOMEDIA TECHNOLOGIES, INC. V. SCANBUY, INC.
August 29, 2013 NY U.S. DIST. CT., SOUTH 1:13-CV-05990 OTHER FEDERAL STATUTES, OTHER FEDERAL STATUTORY ACTIONS

20. NEOMEDIA TECHNOLOGIES, INC. V. SPYDERLYNK, LLC.
April 09, 2012 CO U.S. DIST. CT. 1:12-CV-00939 INTELLECTUAL PROPERTY, PATENT

21. NEOMEDIA TECHNOLOGIES, INC. V. TACO BELL CORP.
April 03, 2013 CO U.S. DIST. CT. 1:13-CV-00863 INTELLECTUAL PROPERTY, PATENT

22. NEOMEDIA TECHNOLOGIES, INC. V. TARGET CORPORATION
May 09, 2014 CO U.S. DIST. CT. 1:14-CV-01315 INTELLECTUAL PROPERTY, PATENT

23. NEOMEDIA TECHNOLOGIES, INC. V. THE WENDY’S CO.
May 20, 2013 CO U.S. DIST. CT. 1:13-CV-01312 INTELLECTUAL PROPERTY, PATENT

24. PLAINTIFF V. DEFENDANT
December 27, 2013 GA U.S. DIST. CT., NORTH 1:14-MI-99999 OTHER FEDERAL STATUTES, OTHER FEDERAL STATUTORY ACTIONS

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