Quick Take: Payment Units of Tencent, Ant Financial Among Those Sued in QR-Code Patent Case

A QR-code developer has sued the third-party payment units of Tencent Holdings Ltd. and Ant Financial Services Group, among others, accusing them of infringing its intellectual property rights related to the barcode technology.

The developer, GMedia Information Technology (Beijing) Co., said in a statement that it filed a lawsuit in Beijing Intellectual Property Court on Oct. 10 against Tenpay and Alipay, plus online apparel retailer Vancl, saying they used GMedia’s barcode technology without permission.

GMedia had mailed letters detailing the allegations to Tenpay, Alipay and Vancl, but hasn’t received their responses, GMedia Chairman Zhong Liduo told a news conference in Hong Kong on Monday.

Zhong said the case was more than “a patent dispute,” adding: “It’s a fight for the leading position of an industry that contains the power of pricing the technology.”

Tencent declined to comment, saying the case has entered the judicial process. Alipay did not reply to Caixin’s attempts to seek comments.

Patent disputes are not uncommon, especially in the technology sector. In fact, this is the second lawsuit GMedia has filed against Tenpay, following a previous attempt in March, GMedia said.

The company also said the lawsuit will have a “significant influence” on China’s mobile payment market, now 38 trillion yuan ($5.74 trillion) a year. Tenpay and Alipay combined have about 90% of the market share, a third of which is transacted by scanning QR codes.

Beijing Intellectual Property Court has accepted the case but a hearing date is still pending, Zhong said. He didn’t disclose the amount of compensation the company seeks.

GMedia’s parent company is co-invested by three venture capital funds, including KPCB, DFJ ePlanet, and Lightspeed Ventures. The company now holds more than 40 QR-code-related patents covering the markets of China, the U.S., the U.K. and Canada, GMedia said.

Contact reporter Leng Cheng (chengleng@caixin.com)