NeoMedia wins patent for indirect mobile barcode so what now?
NeoMedia hasn’t had an easy ride in the mobile space. The once mighty giant commanded a high price on the stock market but in the past few years the empire seems to have broken down. The impetus has changed to one of pure mobile technology where mobile barcodes become the main asset.
Why barcodes?
Well to cut a long and interesting story very short NeoMedia had an early advantage in the image coding space and managed to secure a good few patents. The strategy then was to go forth and conquer and it bought a number of companies (nearly) such as Sponge and Mobot –but then ended the relationship.
Why?
Well the strategy that was set in place was excellent. But it wasn’t robust enough and the market wasn’t ready. Inspiration or perhaps aspiration took over from reality. Handsets and services did not manage to keep up with ideas or the possibility. High data rates and confused tariffs also stopped the mobile barcode or data spacing growing to capacity.
So what was left?
NeoMedia kept once significant accent and an armoury of patents. These patents were either created in-house or purchased considerable amounts. But what it did provide NeoMedia with is an asset portfolio that it could re-structure and work with again moving forward.
After law suit and law suit and patent examination and watching nearly every competitive mobile barcode provider impact or use the specific in-direct code patent that NeoMedia owned – the company has finally confirmed that the patent is legal and can be enforced.
What is the patent?
Well. We all have mobile barcodes which is great and I believe that you shouldn’t pay to have or use barcodes (1D, 2D, QR etc.) But this specific patent is for doing more than just capturing an image with a phone it is (very very simply) for adding an action or interaction to that barcode.
Did NeoMedia deserve to win this?
This might have been questioned but I think this was the right decision. Having followed the market and the industry in the mobile space in particularly - I believe that patents need to be recognised. Also this particular patent was fought for and the prices were increased as I think at the time Motorola or Google were also interested in purchasing the same barcode portfolio.
The fact that millions of dollars have been paid to secure the patents – I think that is extremely important as to their worth and value. Also, my God – if you have and own patents well then they have to be respected because if they aren’t – well then what is the point?
Sharks will steal business models and the market would become cut throat and irrelevant. Because there is a patent authority then – the right decision was made.
The above is my opinion only. The below is an interview with Iain McCready.
But what is the business model now for NeoMedia? I spoke to Iain McCready CEO of NeoMedia on the last day of Mobile World Congress and asked him what the plan was.
Bena: Iain. I am happy that you won the patent but now what. Lots of people are using your IP how are you going to curb this?
Iain: Bena, you know we are nice guys. A couple of competitors in the USA have already asked us for a free license but we can’t accept that. We are a business and so are they. In a reasonable manner at a fair price we want to move forward with this.
Bena: So you are saying that you are open to conversation but a license fee is required.
Iain:Yes. We have invested so much in this and have had battle after battle. But now we are going to power ahead and make this work. I am open to discussion and we want to be seen as fair. We want the whole mobile barcode market to succeed and the license fee model is tried and tested and it works. It can be as simple or as difficult as people want it to be and we aim to keep it simple.
We have been working very very closely with both the GSMA and the OMA by being connected the introduction of a license model can and will only succeed.
Bena:Iain. I love the fact you are relaxed about this and want it to be fair. I think I would have been worried if you turned into the old school NeoMedia and started shouting about “wining the war!”
Iain:Not at all. We are a lean business but we are a business. We can succeed but so can the whole industry. We have invested so much in this as we knew back in the 1990s that mobile barcodes would be huge and now it’s all coming together.
Bena: Iain. I am really glad to hear it. I also met 3G Vision (interview and pictures coming soon) and others here at the show and no one seemed totally adverse to a license model.
Iain: I think that the market was expecting this.
What we think?
In all honesty, I think with this kind of attitude we are looking at a great mobile barcode market moving forward. Iain is an honest nice guy and I think he can make this work. I have been doing some digging into a whole new set of mobile patents owned by NeoMedia and have to say I do think that there might be more than one business opportunity here.
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
Just a note for Bena: I appreciate your articles. They are always very helpful. Thank you for doing this! Ian: We shareholders are here to support NeoMedia the entire way through! I hope down the road we do not see a Reverse Split higher than 1/10. We need your help, to make NeoMedia stronger. Keep up the excellent work! Best wishes.
Google has never considered licensing Neomedia patents (at least while I was involved but have no reason to expect otherwise now.) The simple reason is that nothing Google has done seems to be covered by a Neomedia patent. Conversations with Neomedia themselves have never indicated otherwise — I understand certain investors, who are not employees, prefer to hope otherwise. So, not sure where that speculation came from, except from these same people.
(In fact, Neomedia has seemed quite more reasonable in my experience than their reputation as a patent troll would suggest.)
Neomedia also does *not* have a patent on just connecting barcodes to actions. It is fairly specific to a form of ‘indirect encoding’ which is not, for instance, what occurs when you encode a URL or contact info in a QR Code. Just as we must respect patents, it’s vital to not be deterred from innovating because of misinformation.
I finally don’t think it logically follows that because Neomedia spent a lot of money on the patents, they deserve to be upheld. The patent, of course, must stand on its own merit. We would not want a system in which a corporation could obtain a bad patent just by throwing money at it. (And I don’t think Neomedia “bought” this one — just refuting the reasoning. Though I strongly disagree with the decision, it was made by the USPTO.)
The question of whether it has merit is, perhaps, not worth reopening here. Since you seem to favor one side, I can just offer the argument against, and people can make up their own mind:
http://www.eff.org/deeplinks/2009/02/patent-office-reissue-narrowed-version-neomedia-pa
I think it’s vital to read the last paragraph and ask if you can answer the question — is there any novelty here? Up to you.
Hi Sean,
thanks so much for your feedback. Its nice to hear different angles. I didn’t say that Google had licensed Neo Media technology but I did look back at the Motorola case when NeoMedia bought the patents and Google was the only other company bidding for them - that is what I was referring to.
To be honest I am happy for NeoMedia but am also happy for anyone that succeeds in mobile barcodes as long as they are legal and conform to some standards.
I don’t - or at least I try not to favour anyone -but social media is about conversation and talking to me and trying to be reasonable. You form opinions about what you read and hear and clearly some companies (Microsoft Tag - creating a reader for me) are trying and others don’t think its that important.
I find the search patents that neom has very interesting - I don’t like the colours but I think Microsoft is onto a winner with the Microsoft Tag - I see huge potential from UpCode in the enterprise space, I like the simplicity of shopsavvy -but I do think some patents are being breached there - there is a wealth of opportunity in the barcode industry and I want to see more of it. I like the 1D real eyes 3D stuff and the beeping with the nokia barcode scanner just rocks.
But I do favour a universal reader. I do think that neomedia shareholders can wet the mattress but I still think that patents are vital and there is huge opportunity for Google and Yahoo! in this space too. I try not to favour one side and if people think I am wrong then tell me.
Bena
I didn’t suggest you said that. You indicated that Google and motorola were at least bidding for some patent that Neomedia owns. Unless I am wildly uninformed, Google never did any such thing nor even considered it. But perhaps we are not talking about the same thing. What patent are you referring to? the infamous ‘048 patent? It was not purchased by Neomedia.
I do think it’s important for the debate around this patent to be clear. People like streetstylz post reckless statements like “ShopSavvy infringes Neomedia’s patent”, when we know for a fact these two companies have already agreed this is false. But then this gets posted so much that the meme becomes news. I think it sounds plausible because some here have made an effort to imply these patents broadly cover anything to do with a barcode and phone. I’m sure you’ll agree this is not only wrong but harmful to innovation.
I do think you make a legitimate effort to be balanced in your view and coverage, so in this case I only invite you to look closer at these particular patents to see what they really cover. The EFF post does a pretty good job of showing what the patent covers now — not just their opinion but with clear references to the body of the patent.
@ Sean
I am entitled to my opinion, and I do strongly beleive that ShopSavvy and Compare Everywhere both infringe on multiple NeoMedia patents. Certain Individuals that I have spoken with at NeoMedia beleive the same. Now that NeoMedia’s patent was upheld, validated, and strengthened by the USPTO reexamination, I believe it is only a matter of time before we see a licensing agreement between NeoMedia and Google.
And for the record, yes, Google was pursuing the Loyalty Point / Barpoint patents back in 2005.
NeoMedia Technologies Adds to IP Portfolio by Acquiring Search-Oriented Patents
http://www.tmcnet.com/usubmit/2005/apr/1133257.htm
Google, Yahoo Start Your Mobile Search Engines
http://theponderingprimate.blogspot.com/2005/04/google-yahoo-start-your-mobile-search.html
Street those links don’t say anything about Motorola or Google bidding for these patents! Thanks for trying.
@ Sean,
BarPoint.com and Symbol Technologies Form Internet Partnership, Enter Into Technology and Hardware Agreement
http://www.symbol.com/news/pressreleases/press_releases__portsys__barpo.html
BarPoint Supports New Symbol/Motorola Barcode Venture
http://www.allbusiness.com/media-telecommunications/6456545-1.html
I heard first hand that both Motorola & Google were pursuing the Loyalty Point / Barpoint patents back in 2005. These patents will prove extremely valuable and NeoMedia owns them!
Sean, NeoMedia has the patient period, for good or bad they have it get over it. Beside you working for Google with your Pet project, do you know all the strategic meetings held by Google regarding this market. Are you on The BOD of Google, do they consult with you on their strategic moves. Unless they still call you for your input, it sure sounds like you speak on behalf of Google.
Are these your opinions or are you an official spokesperson for Google.
“This might have been questioned but I think this was the right decision.”
Bena, have you look at the ‘048 patent *in detail*? Have you read all the claims? Have you looked at the prior art? Yes?
ceo
I read all the patents about one year ago now - so 048 doesn’t spring to mind. But I will take a look - any more details to save me having to digg around now would be great!
Bena, take a quick look at this:
http://weblog.cenriqueortiz.com/general/2009/03/29/usa-patent-no-6199048-neomedia-is-weak-and-harmful-to-our-industry-part-1/
ceo
Hi,
thanks - I read the article and I am afraid I don’t agree. There are going to be a lot of patent issues with mobile now -but in this case the 048 is granted. I checked and its the big one that everyone has been talking about and the one Scanbuy is locked in a battle with NeoMedia about.
I am going to call Iain McCready from NeoMedia today anyway and would you like me to introduce you?
Bena
Thanks for the offer. Not at this moment, as I am still doing research on this…
Just make sure you understand the whole picture, including claims vs. prior art, before agreeing (or not); that is all I ask.
CEO
Yes. I understand.
The problem is: at the time ten years ago when NeoMedia started and then back in 2005 when the patents were created they were “genius”. They might not be now -but at the time they were. Out of the original 90 odd patents 29 are standing and 4 were even bought for millions of dollars. There is a lot of history here.