Wednesday, May 24, 2006

The Physical World Connection Makes The Wall Street Journal

A couple weeks ago, I was interviewed by the Wall Street Journal about how the camera on a mobile phone and barcodes will provide a way to surf the physcial world. The camera acts like a mouse and barcodes will provide hyperlinks to a website.

Jessica had read The Pondering Primate and asked for my input.

A lot of the interview wasn't included, but the idea that the WSJ is exposing this disruptive technology, is very encouraging.

Cellphone Services Read Codes On Ads, Products, Buildings And Link to Details Online

While shopping at a Whole Foods store in Los Angeles, Richard Jefferson spotted a curious sticker with tiny black squares on a package of Yum Tum raw vegan pizza.

Intrigued, he sent a text message to a number listed on the package and received a link prompting him to download software to his Sony Ericsson cellphone to decipher what turned out to be a bar code. The software allowed him to snap a picture of the bar code to be connected to a Web page with recipes and health tips from Yum Tum, a raw-foods brand in Los Angeles.

These are codes from Netxcode's Connexto.

"This could be huge," he says. A rising number of people are using new free services to connect to the mobile Internet by photographing bar codes. The codes -- either conventional bar codes or digital ones -- are showing up on more products, advertisements, books and even buildings.

I have been calling them physical world hyperlinks . The camera on the mobile phone acts as a mouse and the barcode is used as a hyperlink to get to a targeted website.

The technology is popular in Asia but previously failed to catch on in the U.S. after several attempts. Now, improving technologies and the ubiquity of camera phones are triggering a host of new bar-code services.

Nokia Corp. has built its own bar-code reader into new models of two camera phones that are scheduled to become available in the U.S. this fall.

Scanbuy Inc.'s. Scanbuy Shopper, expected to be live in the next few weeks, grabs prices and reviews, for example, from a Universal Product Code, or UPC.

Nextcode Corp. has launched ConnexTo , mobile software for reading digital bar codes that are cropping up on food packaging and posters.

NeoMedia Technologies Inc., which owns mobile-ad firms, will launch its bar-code reader PaperClick later this year.

The codes are appearing gradually in grocery stores, embedded in business cards, on promotional posters and T-shirts and even near landmarks like the Chrysler Building, around where people placed a code linking to the building's Wikipedia entry.

They are piquing the interest of advertisers who see the potential to serve up more relevant ads -- a trailer downloaded off a movie billboard, for instance -- and consumer-product companies trying to make products more interactive.

The technology, part of the mobile industry's push to embed more functions and features into mobile devices, is still in its early stages, meaning the new services may only work with some camera phone models and service providers. While there is vast potential for the technology -- from downloading movies off billboards to helping diabetics purchase food safe for them to eat -- a range of hurdles have some questioning whether the applications are functional enough to succeed.

Not all software programs can read all types of bar codes. This means consumers must, for now, pick and choose among services.

Scanbuy, for instance, works with standard bar codes while Semacode Corp . uses a code standard called Data Matrix. When PaperClick launches it is likely to used a third symbology, Aztec .

The new services also have some competition from other companies working to provide similar services off existing logos and images, not bar codes. Mobot Inc., owned by PaperClick's parent company NeoMedia, lets users snap images directly from a magazine or billboard.

The user sends the picture to an address, and Mobot's technology reads the contours of the image stored in its database and sends a message back with the relevant content, such as promotion details.Packages of Yum Tum's raw food use a new-style bar code that links customers to recipes and ingredient information.

Companies are seeking to make the bar-code technology easier to use by preloading it on mobile devices. Consumers, who are turning to their phones for a multitude of functions from downloading ringtones to text messaging to mobile Web browsing, also appear more ready for the services, which are free excluding data fees.

About 15% of U.S. cellphone users accessed the Web on their phone last month, according to Seattle-based mobile-research firm M:Metrics.While two Nokia models will come with bar-code readers standard in a few months, consumers for now have to get the software themselves.

Most services can be downloaded to a camera phone by typing a Web address into the device's browser. Some applications, such as PaperClick, ask those who sign up for some demographic information such as age and location to better tailor the types of results they see.

From there, users click on the application icon, hold the camera a few inches away from the code, and click as if taking a photo. (Some detect the code automatically and register it without clicking.) The software decodes the information, typically a Web link, and quickly directs the user to the relevant Web page.

It's a new chapter in bar-code history. In the 1950s, two inventors filed the first bar-code patent, which included a sketch of a ring of concentric circles. In later decades the Universal Product Code, a symbol whose fine lines could be scanned at a checkout counter, for instance, emerged.

Today, commercial uses of bar codes proliferate. Airlines use them to shuttle around baggage and delivery services rely on them to help track packages. The Pondering Primate, Scott Shaffer, 39 years old, a private investor in Boca Raton, Fla., recently went to the ConnexTo Web site to create his own bar code that he now puts on his business cards. Now, anyone with the ConnexTo reader downloaded to their phone can snap one of his cards to be routed to a Web site with his name, address, phone number and email.

Google Inc. and Yahoo Inc. already offer mobile versions of shopping Web sites or text-messaging services that pull up a few lines of abbreviated text per query.

Scanbuy Shopper promises to deliver more information like reviews and comparison statistics through miniature Web pages. The new service, which will allow users without the appropriate camera phone or lens to key in the bar-code number manually, has also been updated to read codes in dim light and at odd angles.

Textbook publisher Prentice Hall will be putting PaperClick smart codes in the next edition of one of its introductory-marketing textbooks expected to be released in January 2007. A handful of codes will appear in some entries in the text linking to further examples and related news articles.

Nonprofit groups also are using bar codes for new purposes. A world-wide project called Semapedia involves people creating more than 2,500 codes that they are sticking to or near landmarks like the Leaning Tower of Pisa or Machu Pichu. The codes link to the Wikipedia entry for the location.

Write to email Jessica E. Vascellaro


Anonymous said...

I wonder which of these companies really has a ticket to play in this space -- namely the basic IP that will enable them to keep from being forced out by others through patent suits.

For a long time, the technology industry, and its customers, have been in denial about the significance of patents. But it's becoming increasingly obvious that patents are going to play a critical role in how technology plays develop.

I gather Neomedia has some patents in this space, but what sort of protection does Nextcode and Scanbuy have? Could they be thrown out of their curent business by a patent suit and an injunction? My impression is that they don't yet have any patents to their name -- doesn't that imply that they are already too late to the game?

Why would a potential customer want to expose themselves to a patent suit by using their technology? Isn't that what happened to Virgin Music when it used an application not protected by a patent owned by the company offering them the technology? Didn't Neomedia sue them? How many customers want to go through that?

And 2D codes are as common as the air. Why go with the ones not protected by good patents on their applications?

Anonymous said...

Just to follow up my previous post, how hard is it for a company to enter the space with a new 2D code? If there's no real IP behind a code, what's to prevent another company from copying whatever good features that code may have and do it itself? There must already be good 15-20 codes out there competing for this space already, and the market hasn't even reached the boom stage yet!

How long can any perceived advantage of a code unprotected by IP possibly last? Why should a potential customer go with a code that might expose them to patent lawsuits when another code, well protected by patents, can easily copy any minor advantages an unprotected code might enjoy?

I hardly think it makes sense for a customer to plunk down for a very, very, short lived advantage in a given 2D code when another 2D code, with good IP behind it, can quickly incorporate any features in alternative unprotected codes.

Anonymous said...

Actually, the use of patents to cut down the thicket of 2D codes is a very positive thing.

A huge problem for this space will be to settle on a standard 2D code, with standard applications encoded. How is this space going to be cut down to size, instead of facing the gazillion potential choices?

Well, one way is to use patents as they have ALWAYS been used, as a way to cut out players who were not the pioneers in the area. Essentially, this is the role patents have pretty much always played throughout American history. It's only the technology industry that's just now figuring out that that's the way things work, and should work.

streetstylz said...

It would appear Scanbuy will have to license with NeoMedia in order to use their patended Paperclick tecnology if Scanbuy wants to be a player in the "physical world connection" space.

Scanbuy's rejected patent applications:

20060011728 Mobile device gateway providing access to instant information
Status: 3-22-06 Non-Final Rejection (3 month to appeal) Claims 1-7 rejected

Transaction History
Date Transaction Description
03-22-2006 Mail Non-Final Rejection
03-20-2006 Non-Final Rejection


20050011957 System and method for decoding and analyzing barcodes using a mobile device

Status: Final rejection
02-28-2006 Mail Final Rejection (PTOL - 326)
02-21-2006 Final Rejection


20050004844 Integrating bardoce scanner enabled services in existing e-commerce applications

Transaction History
Date Transaction Description
03-23-2006 Mail Non-Final Rejection
03-20-2006 Non-Final Rejection


20050029356 Scanner reader Active-X plug-in

Transaction History
Date Transaction Description
05-02-2006 Mail Final Rejection (PTOL - 326)
05-01-2006 Final Rejection


20050029354 System associating sets of data into one barcode

Transaction History
Date Transaction Description
02-28-2006 Mail Non-Final Rejection
02-21-2006 Non-Final Rejection

(Note: Non-Final rejections have 3 months to appeal, otherwise they are pronounced Final Rejections)

Anonymous said...

Go back to investorshub. Boy it sounds like you are just repeating the claims found on the "pump and dump" Investorshub board reharding NEOM. Get the facts staight please. Neomedia has yet to be awarded the specific patents in this area. IMO, their patents are too broad and we shall see if they will apply to the barcode scanning via cellphone space.

Anonymous said...

"IMO, their patents are too broad"

And since when do YOU get to decide the appropriate breadth of a patent?

This is the typical arrogance of copiers/infringers in the technology field. They get it their own heads that a patent shouldn't be granted for some reason like it's "too broad" or "too obvious", yet they can't seem to manage to come up with any PRIOR ART that would demonstrate that the patent should be narrowed or invalidated.

And why can't they come up with prior art? Because, in fact, the idea was NOT obvious, and the idea WAS very broad, and someone at some point DID finally become the among the first to come up with the idea and file for a patent. And that is the person or persons holding these fundamental patents.

Can anybody seriously claim that using bar codes to download content and perform transactions from the web is not a revolutionary idea? Isn't that idea broad? Isn't it highly non-obvious? Aren't those the criteria for granting a broad, basic patent? The same people who want to act as if these ideas are obvious are way too broad turn right around and describe their own implementation of this idea as "revolutionary" and "bold". But you really can't have it both ways, can you?

And what on earth does doing scanning from a CELL PHONE in particular have to do with the general patentability of an idea? If you describe how a digital device can perform a certain function, why doesn't it apply to a cell phone which is also a digital device?

Anonymous said...

And another point.

The same people who are now talking as though there shouldn't be a patent broad enough to cover cell phones, as opposed to personal computers, when it comes to the print-to-web concept, would howl in protest if there were a patent granted for doing it on a cell phone.

What would they say? "Well, look, there's this earlier patent that describes how to do print-to-web with a personal computer -- but it's just OBVIOUS how to extend that to a cell phone! It's outrageous that anyone grant a patent on THAT obvious extension!"

And by talking out of both sides of their mouths, the infringers hope to achieve what they most desperately want: the gutting of the patent system so that they can happily copy other people's ideas at will and with complete impunity.

These people have no arguments. They have only incoherent rationalizations to allow them to ripoff other people's ideas.

JPetroInc said...

Its not about patents anymore people. That fight has been fought and predominately won. It's now about how to slice up the mobile marketing pie. Regarding ScanBuy, IMHO NeoMedia has dictate on 1 of 3 of the more prevelant outcomes as follows:

1.) SB pays $1Mil. est. cash upfront and licenses w/ % of revenue going back to Neomedia for eack click-thru ScanBuy's customers perform.

2.) ScanBuy comes into NeoMedia's fold (via way too many alternatives to mention here).

3.) ScanBuy sits and waits to go into Chapter 11. However, their VC will not allow this to happen. Simultaneously, ScanBuy will not be allowed to launch with the current 'Cease & Decist' order in-place.

So the Sixty-Four Thousand Dollar question is what will ScanBuy do next? The ball is squarely in their court. Our eyes are fixated on Jonathan Bulkeley.

All the Best, JP

Anonymous said...

Sometimes the question gets asked, will these basic patents possibly hold up in court? I simply can't understand why they would not, at least some of them.

Look, using bar codes to link to the web, and enable transactions over the web, and hyperlinking the physical world via bar codes, IS a revolutionary and a bold leap beyond what bar codes have been used for in the past. Present the idea to anyone unfamiliar with the concept, and they will immediately recognize something new and basic and powerful is going on in that idea. SOMEONE thought of that idea, at some point. Why, then, shouldn't those who conceived of the idea very early and filed for patents be granted such patents? Why expect that there would be prior art on this clearly new idea? Why imagine that the patent will be overturned in court? Isn't the reasonable expectation that some such patents will indeed survive all court challenges, and readily, precisely because they were filed by the true pioneers of the idea?

In short, the presumption of surviving a court challenge seems very much in favor of the patent holders, assuming that the patents themselves were filed VERY early in the game. Late comers may well end up with nothing, but the pioneers should certainly expect to have something of great value.

Scott Shaffer said...

I'm not a patent attorney, and I don't play one on the Net, but I have been told by people that make a living around IP that it is way too early to predict who will be the "winner" in this space.

When physical world connection is ACTUALLY IMPLEMENTED, and not just a novel idea, that is when you will see ALL of the patents that are associated with linking a physical object to the Internet, revealed.

Larry said...

Why would companies sit back and wait for other people to go to market with their product in a space that is heating up like mobil marketing is. At the very least you would think they would promote the issuance of this IP so others would know what is out there to deal with.

Anonymous said...

"it is way too early to predict who will be the "winner" in this space."

I think this is a fair statement.

But some indication of who the potential holders of basic patents will ultimately be should be based on the filing date of the patents. In US law, it is date of conception that counts, so any indication of how long those ideas might have been in process by the patent holder will also be relevant.

But late comers to the game (and most of the new codes are generated by companies very late in the process) are almost certainly out of the picture, as far as basic patents go.

Yum Tum said...

As the Executive Chef & Owner of YUM TUM, the brand mentioned in The Wall Street Journal article on bar codes, I am eager to add that Mobile Barcodes can be a very disruptive techonology once it becomes 'Universal". As I look for cool ways to connect with my customers I find that texting to a short code has become commonplace for customers (after its ubiquitous use on American Idol). But scanning a mobile bar code with a cell phone - transforming your mobile phone into a super decoder device - is truly exciting for my cutomers! Suddenly the mobile phone becomes a "new toy". In fact my cutomers have been so excited that I begin to see many cool ways to use this "new toy". For example; groups, record labels, youth or alternative media could use mobile barcodes to hide "secret information" in plain sight i.e.; stickers on lamposts, garbage bins, billboards, t-shirts and posters! Mobile barcodes can be a new form of guerilla marketing. Barcodes can be a cheap way to by-pass the short code thing for SMS transmissions. It can be very cool way to get your message or information out quick and cheap!

At Yum Tum we have a free mobile service that sends Health Tips and Raw Food Recipes directly to subscribers mobile phones. Because we are constantly looking for ways to help improve your life as you live it! And the mobile barcode is one more way to help us bring cool information/content to our friends for free!

Yum Tum said...

How can you use mobile barcodes to do cool things for FREE! Go to that is how we did it at Yum Tum!!! As cool as the mobile barcodes are they are only really coooool if you can get them into the greatest number of hands for FREE! And only Winksite is making it possible for your average Joe to do this! Winksite is way ahead of the pack! (They'll be the next Blogger or Typepad). They get what disruptive technology can do and their doing it!

Since Yum Tum started using Winksite our page hits have gone through the roof, our cutomers can get the info they need at their fingertips, and Yum Tum got into the Wall Street Journal! You talk about being disruptive to the stauts quo!

Winksite helps David take on Goliath in the SNAP of a cell phone!

Anonymous said...

Riddle me this Mr. Shaffer ...

Why in the heck is this eroneous post still listed:

"Go back to investorshub. Boy it sounds like you are just repeating the claims found on the "pump and dump" Investorshub board reharding NEOM. Get the facts staight please. Neomedia has yet to be awarded the specific patents in this area. IMO, their patents are too broad and we shall see if they will apply to the barcode scanning via cellphone space."

This has no baring on the topic at hand ... Purely slanderous. NeoMedia (NEOM) is hardly a pump in dump stock ... And the price per share clearly illustrates that. Get a life and go buy some shares of NEOM while you're at it prick.

Clay G. said...

Why is everyone so afraid to use their real names here?