qr-format-wats-copy.jpgNew York-based Scanbuy, the maker of the proprietary “ScanLife” Mobile 2-D Barcode Reader and “EZCode” code format, has been on a tear of late, scoring a series of high-profile campaigns that have buoyed the prospects of the nascent channel and rekindled the “open” versus “closed” mobile barcode debate.

Scanbuy’s recent announcements include an OOH integration campaign with American Airlines at four major airports, including LaGuardia and O’Hare. American Airlines also joined Car & Driver, Citysearch, Discovery Communications and Sears in participating in Scanbuy’s “cross-carrier pilot.” Additionally, Scanbuy has also found success in Europe, launching with MTV France’s “Crispy News” and landing a few handset pre-load deals in Spain. The company also recently announced their ScanLife reader has been ported to the iPhone and will be available for download upon launch of the iPhone App Store (expected June, 2008).

While all of these are obviously positive steps in driving mass adoption of 2D barcodes, it needs to be pointed out that the Scanbuy technology suite is a proprietary (closed) system, meaning that the “EZCodes” in question can only be read by ScanLife’s reader; Consumers attempting to read the EZCodes with other, so-called “open format” readers will not be able to interact with the code. The “open” format, which is used by the Android “ZXing” and many popular European and Asian reader brands, is based on a design by the Japanese Denso Wave company, and it is “open” in the sense that the company does not exercise their patent on the technology – meaning that the standard is essentially “free.”

Business Models. Companies like Scanbuy and ShotCode that utilize a proprietary code format primarily make their money by charging brands to create the codes, as well as redemption fees (which are levied every time a consumer scans one of their codes). This is in stark contrast to the “open” format model, where the printing of codes, “scans” and even some cases the readers themselves are all essentially free. These companies primarily make their money by either bundling in other, related mobile marketing services (such as SMS or mobile website creation and hosting), as well as charging for analytics services quantifying QR campaign performance.

Now, you may be asking yourself, “Why would a brand would pay to use a proprietary 2-D code format when they can essentially use an open format for free?” Well, for now the issue is scale: The install base on proprietary readers is greater than that of the “open” readers. That said, with the coming of Android handsets this Fall (all of which will include an “open” QR reader preloaded on the device), the real question is how long will the proprietary readers be able to maintain their advantage…

In the meantime, competing standards are the price one pays for innovation. Let us hope these issues resolve themselves soon, as the quickest way to kill this exciting new market is with fragmentation. I think we can agree that requiring users to have a half a dozen or so readers installed on their phones is a nightmare we’d just as soon avoid.

24 Responses to “QR Format Wars Heat Up As Scanbuy Gains Traction”

  1. #1 streetstylz says:

    It should be noted that:

    Scanbuy’s indirect resolution process, which they use for their proprietary EZcode, is infringing on NeoMedia Technologies’ core patents.

    Scanbuy uses the indirect encoding method for their barcode resolution process.

    Indirect encoding (patented by NeoMedia) is the process of linking the target information to an index (364528 for example) and putting that unique identifier into a 1D UPC/EAN or 2D barcode. The code reader on the mobile phone reads the barcode and sends the code data over the Internet to a central resolution server that will tell the mobile phone what action is associated with the index, i.e. access a URL, download media, initiate a phone call, ect.

    NeoMedia Technologies has a suite of twelve issued patents covering the core concepts behind linking the physical world to the electronic world dating back to 1995. These patents cover various linkage methods including: Barcodes, RFID, Mag Stripe, Voice, and Other machine readable and keyed entry identifiers.

    http://neom.com/13.html

    NeoMedia brought suit against Scanbuy. Litigation has been ongoing.

  2. #2 jamie wells says:

    Thanks streetstylz.

    I was aware of the suit and the issue… but failed to mention it in the piece due to, well… laziness basically!

    Keep up informed of how things are progressing on this… and thanks for joining the conversation on mobilestance!

    -jamie

  3. #3 dean collins says:

    I guess streetstylz forgot to mention that the EFF has had the neomedia patent re-examined.

    http://w2.eff.org/patent/wanted/patent.php?p=neomedia

    move along…nothing to see here

  4. #4 dean collins says:

    Anonymous has left a new comment on your post “U.S. Patent Office Rejects All Ninety Five NeoMedi…”:

    It’s sad to see an adult act like such a childish douche bag.

    This was a NON-final rejection. Not a final rejection.

    The USPTO sets aside claims 1-95 by marking them as rejected for reasons cited in the USPTO document. This is standard procedure. NeoMedia’s patent lawyer now has 60 days to formalize his response to the USPTO and demonstrate to the USPTO why the
    claims in their patent are valid.

    It ain’t over until the fat lady (insert Dean Collin’s joke here) sings.

    Bitch !

  5. #5 dean collins says:

    lol i love how passionate neomedia supports are to their sinking ship

    http://deancollinsblog.blogspot.com/2008/07/us-patent-office-rejects-all-ninety.html

  6. #6 Ben says:

    My company, (Usablenet) did the mobile shopping optimization for Ralph Lauren and they had a huge QR push. Here’s a review and a links to their press: http://mobilewebsitewatch.com/2008/08/ralph-lauren-harnesses-mobile-market/ Scuttlebutt is that KIA is going to do a campaign next.

  7. #7 jamie wells says:

    Ben, according to the URL in the QR download page, Augme appears to be powering the QR part of the campaign. Is usable doing the transcode on the mobile website?

  8. #8 streetstylz says:

    NeoMedia Wins Patent Reexamination !!!!!!

    http://finance.yahoo.com/news/NeoMedias-Barcode-Lookup-bw-14397693.html

    :)

  9. #9 dean collins says:

    do you have anything to support this apart from the Neomedia press release yesterday?

    I’m still yet to see anything from the USPTO about what they have actually approve or what the process is from here.

    so far lots of blog comments and a $600 press release but nothing official.

    Cheers,
    Dean

  10. #10 Rogerro Manning says:

    I suggest to everyone who is interested (incl. Dean) that they talk to Jason Schultz at the E.F.F. He’ll tell you that 89 of the 95 claims in Neomedia’s 048 patent have been confirmed, albeit with a few amendements. As I’m sure we’re all aware, this is the third examination of this patent by the PTO (initial + two re-examinations, both requested by the EFF)…so it’s game over for those who have been ignoring Neomedia’s patents. I’m not necessarily a fan of Neomedia…but like most Aussies…believe in giving the author of any IP a fair go in relation to reward for their creativity and innovation. Pirates throughout the ages are simply parasites, living off the good work of creative, innovative and hard working people.

  11. #11 dean collins says:

    so why did the Neomedia press release say all 95 out of 95 patent claims have been approved?

    my advice to clients are continue as you are doing and let neomedia try and sue you for patent infringement.

    I dont believe neomedia will be suing anyone for patent infringement because there are so many ways to work around their patents that they wont successfully be able to sue you for infringement.

    I beleive in giving people a go but not for the immediately obvious.

    In addition I’d also like to know when are we going to get a transcription of the mysterious telephone call of the 4th of Feb 2009?

    Cheers,
    Dean
    Dont like what i’m saying sue me. I look forward to it.

  12. #12 Rogerro Manning says:

    It has been the complete absence of any integrity, so aptly demonstrated by the above remarks, that has driven the industrialised world (the USA in particular) to its current predicament.

  13. #13 dean collins says:

    Yep it’s hard enough to introduce a new technology without all the BS stock pump and dump players and the lawyers at 10 paces attitude by some of the entrants.

    the best part is that some people are doing the hard work quietly and the customers are happy.

    Cheers,
    Dean

  14. #14 WK says:

    Mr. Collins: Please review the following, IMO the most professional thing so far written on the Neomedia re-exam win:

    CASE STUDY – REEXAMINATION OF US PATENT NO. 6,199,048

    http://www.barkume.com/Site/IP_News/Entries/2009/2/25_CASE_STUDY_-_REEXAMINATION_OF_US_PATENT_NO._6%2C199%2C048.html

    Also, Neomedia’s PR said that the USPTO held that all 95 claims of the original patent were held to be “patentable”.
    That is a true statement. It is also a true statement that USPTO allowed Neomedia to consolidate those 95 patentable claims into 89, and to modify them a bit to more clearly describe the invention that is the subject of the patent. As a result, the patent has, in truth, been strengthened. It now more clearly covers what Neomedia wants and intended it to cover.

    Also, from a patent law blog written by a patent lawyer: http://www.patentlyo.com/patent/2008/10/prior-art-must.html:
    “Burden particularly heavy: A defendant [an accused infringer] who hopes to use previously considered art to invalidate a patent has a “particularly heavy” burden. Thus, a party challenging patent validity has the burden to prove its case with clear and convincing evidence. When the examiner considered the asserted prior art and basis for the validity challenge during patent prosecution, that burden becomes particularly heavy. See Hewlett-Packard Co. v. Bausch & Lomb Inc., 909 F.2d 1464, 1467 (Fed. Cir. 1990).”

    Finally, the Chief Justice of the US Supreme Court has said, during oral arguments in 2006 on an importatnt patent case:
    “In hindsight, everybody says, ‘I could have thought of that,’ ”….

    I am confident that the patent lawyers who work for companies desiring to operate in this space will understand all of this and advise their clients appropriately.

  15. #15 dean collins says:

    WK,

    LOL – You do realise Barkume is the lawyer for Neomedia correct?

    Of course they are going to say the claim is watertight.

    I’m interested in finding out when they are going to release the transcript of the 4th of Febuary call to the public? why wont they produce the events that occured during this call?

    Cheers,
    Dean

  16. #16 WK says:

    Dean: Of course I know Barkume is the lawyer for Neomedia, and therefore is necessarily going to advoacte his client’s position. But the same is true about the lawyer for the EFF. Why give the latter (who lost) more credence than the former?

    And that last remark of yours reminded me of what Stephen, the Irish guy in “Braveheart”, said: ” The Almighty says, “Don’t change the subject, just answer the %!!@##!! question.”

    Nevertheless, I would like to know what you think is in the February 4 conference call that is so important. Why don’t you just tell us? You seem to know.

  17. #17 Rogerro Manning says:

    It’s been awhile since I’ve visited this site…and it would seem that Mr Collins (MOZI) has finally been silenced. Congratulations WK…you’ve achieved what none of us before you have been able to.

    FYI…MOZI is an abbreviation for mosquito (blood-sucking insect)…but also an acronym for Man Of Zero Integrity.

  18. #18 dean collins says:

    Nope, just busy working.

    Like i said before, as far as i’m concerned the Neomedia patent is worthless and i’m treating it as such.

    Bring on the first test case.

    Cheers,
    Dean

  19. #19 Rogerro Manning says:

    MOZI…If you’re in the licensing business, get on the phone, cos I believe we’re going to see a plethora of licensing arrangements between those that hold the IP, and those who want to use it. Good commercial sense will prevail.

    My very best regards…Rogerro.

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