Bena: Hi Iain (Iain McCready CEO NeoMedia), lovely to speak to you again and thanks for talking to me. First of all, congratulations.
Iain: Thank-you Bena, this licensing agreement is a great start for us. It shows that we have genuine technology, genuine IP and serious players in the market looking to bolster their business models legally and effectively.
Bena: How did the deal with Mobile Tag come about?
Iain: We started talking to Mobile Tag in February during Mobile World Congress. Then we turned the agreement around relatively quickly.
Bena: Was it difficult or OK working with old colleagues?
Iain: No. Not at all. In fact, Chip knew exactly why this was vital for Mobile Tag and for us, and how important it would be for Mobile Tag in the US market. I would say it helped the process working with Chip because of his understanding and knowledge of the mobile barcode industry, patents and NeoMedia.
Bena: OK. Who else are you working with for licensing.
Iain: Until deals are signed I can’t divulge any information.
Bena: But are people coming to you or are you pushing?
Iain: Well, it is a bit of both. I think the whole barcode industry has been aware of the troubles that NeoMedia had in the past with the patents. Now there is a strong conclusion. We won our case and we have patents globally – vendors are just accepting the decision and asking us about licensing the IP. I feel the market has been waiting and now is eager to move forward with us.
Bena: What about your lawsuit with Scanbuy?
Iain: We have a had a long and ongoing law suit with Scanbuy. I do talk to Jonathon (CEO Scanbuy) on occasion and we are aware of one another. But now it is in the hands of the court.
Bena: But because Mobile Tag is licensing your IP, can the lawsuit be nullified?
Iain: Bena, you cannot nullify a lawsuit. The lawsuit has run and run, and has been very expensive but it’s in the hands of the court. We were unfortunate as our Judge in the case died. This meant that we needed to wait for a replacement to come and that has hampered our process. But in short; NeoMedia has filled out our case for the judge. Scanbuy has done the same and now it is in the Judges hand. He must set a date for a hearing.
Bena: Is it Judge Judy – one hearing and its over?
Iain: Not likely. It might be another drawn process.
Bena: You say it was expensive. If Scanbuy doesn’t win, can the company fail?
Iain: I don’t know. Scanbuy is a private company and I am not sure of its finances or investors. I think that if the lawsuit goes on and on and more people license our IP then we have the best and strongest case.
Bena: Do you think you have a strong chance of winning?
Iain: Yes. We have won the patents, we have licensing agreements and we are close to signing several new deals within the next six to eight weeks.
Bena: OK, before I ask you about some new deals … Tell me about the actual fee structure for the licensing – because I spoke to Scanbuy and they said that you weren’t cheap.
Iain: If someone comes to us and says they want a global license, then it can be expensive. But in most instances this is not the case. We do a mixture of upfront license fees and ongoing fees. But defining the field of use and geography is vital. Some applications for one country can be small but other licenses for the enterprise can be expensive.The kind of shape of deal that we do and the structure depends on patents globally. We have started with the US as the market is so large. The re-affirmation of the patent ruling and the US potential is also huge. If you start with a US license you have the option to add Canada, Mexico and Brazil with additional fees. If you are only focused on Brazil that is another smaller option.
Bena: But are you very expensive?
Iain: No. We only talk sensible numbers as we want an open market, interoperability and the mobile barcode market to succeed.
Bena: So what is the aim of NeoMedia? Are you just going to license from now on? Or are you going to also compete against your license partners?
Iain: We are building our own business and we need competition. I think I mentioned this before, we need competitors as the market potential is enormous. We can’t be the only player in the market but we can license fairly and ensure that the market place can succeed and make profits for all mobile barcode players.
Bena: OK. So you have started in the US. But will you move to France and Spain and Europe? Even though Mobile Tag is huge in France and Scanbuy in Spain – they are still on the agenda for NeoMedia. You won’t simply say “you license from us so we stay out of the market”?
Iain: No. We are a competitive scalable business with a team making deals regularly.
Bena: OK great. Just to move slightly away from this now. What about the competitors in the market such as Bokode and Microsoft Tag.
Iain: I think there is always going to be innovation. Remember this year was “the year of RFID and NFC”, but it hasn’t happened. Microsoft Tag is another proprietary code and the bokode is a novel idea but very very early stage. It might need ten more years to take off. Even today NFC still needs 3 years or so to really gain traction. So innovation is good and necessary but new developments take time. There can be a myriad of issues that impact new IP and at the end of the day – we are past this with 1D and 2D codes. 1D and 2D codes are the future for the next five to ten years.
Bena: OK Iain. What do you think of consolidation in the mobile barcode space. I know three early stage start-ups that have failed already, but what about the current leaders and the market – will it be the same in 5-10 years or not?
Iain: I wouldn’t think that the same players in the market now will be the same in 5-10 years. Consolidation is inevitable. Many players here today will not be here tomorrow and whatever happens consolidation is inevitable with in the next five years.
Bena: Super. I think I have it now; but any final remarks on the future of NeoMedia and the licensing?
Iain: Our first licensing agreement is a first small step for us – but it is also extremely important. I mentioned that we are going to announce more deals in the next six to eight weeks that I can’t discuss now –but this one small step can make us fly.There is so much interest in mobile barcodes as they go mainstream and we are part of it.
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