Investel Sues Snap to Invalidate Key Patent

Investel Capital announced today that it has filed a lawsuit in U.S. federal court against Snap, who just filed to go public this spring.

Investel is a Vancouver-based developer of a social media posting gateway called iFramed. The company wants to invalidate a patent that is central to Snap’s revenue model of its flagship product, Snapchat.

Investel said it invented and owns the rights to location-based filters that Snap calls “Geofilters.” Snapchat’s geofilters, which use the geolocation of social media users “in order to provide on-demand insertion of external content in the form of a frame or overlay on pictures or videos,” infringe upon several claims held by Investel’s patent, the company says.

Investel in August filed a patent infringement lawsuit against Snap in the Federal Court of Canada, and the court ruled in favor of Investel on sufficiency of the claim to proceed. Snap’s filing does not mention Investel’s lawsuit but does describe on page F-29 how Snap agreed to pay $157 million to a man who asserted that Snap was “using certain intellectual property that the individual jointly owned with our founders.”

“The revelation that it settled an intellectual property suit with Reggie Brown, an ‘ousted founder’ of Snapchat, shows that the company has a pattern of grabbing intellectual property that it does not own or have the right to use,” said Lawry Trevor-Deutsch, Investel’s Managing Partner. “Snap clearly does not respect intellectual property rights. It is unconscionable that they did not even mention Investel’s patent litigation in its filing.”

According to Snap’s registration statement, “We monetize our business primarily through advertising. Our advertising products include Snap Ads and Sponsored Creative Tools like Sponsored Lenses and Sponsored Geofilters.” 

Trevor-Deutch suggests Snap develop proprietary technology for its app’s monetization.

“Our company is not for sale, and the patent is not available for license to Snap,” he said.  “The lawsuit seeks to protect Investel’s revolutionary technology that allows social media users to brand and monetize their content.”

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