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Business in Vancouver

Vancouver-based company sues Snapchat for patent infringement

Investel Capital Corp. lawsuit centres on social media giant’s use of geofilters that pinpoint customers’ locations

PUBLISHED : Thursday, 25 August, 2016, 4:29am
UPDATED : Thursday, 25 August, 2016, 11:27am

A Vancouver-based investment fund has filed a patent infringement lawsuit against social media giant Snapchat.

Investel Capital Corp., an investment fund focusing in telecommunications, claims that Snapchat’s geofilter system violates several patent claims. The company’s subsidiary, Teliphone Navigata-Westel Communications Inc., holds the patents.

“We will not stand by and permit other companies or organisations, including Snapchat Inc., to exploit our proprietary technology,” said Lawry Trevor-Deutsch, managing Partner at Teliphone.

Investel is suing for compensatory damages and is also seeking injunctive relief.

Snapchat geofilters use social media to determine a users location. Based on that information, the app then provides location specific picture and video. These filters add a digital image to users’ pictures and videos that showcase a particular brand. Investel says this technology infringes on several claims held by the company’s patents.

Geofilter advertisements are one of the ways that Snapchat has been able to monetise its smartphone app, by providing location and demographic specific advertising. In June 2015, McDonald’s became the first company to pay Snapchat to run an advertising campaign based on geofilters. When Snapchat users were at a McDonald’s location they would get access to the restaurant’s themed photo filters.

The Investel subsidiary uses the technology for its iFramed product, which allows advertisements to be integrated into photos or videos based on the user’s geographic location and demographic information.

Teliphone’s iFramed offers capabilities similar to Snapchat’s. However, the iFramed app also encourages its users to publicise their pictures that use filters to promote brands, through their social media. The company’s revenue model is based on advertising sales. Companies pay to have their own photo or video filter, which features their message and brand. Half the money paid goes to Teliphone, the rest is used to pay users who post pictures and video with the brand’s filter.