Canadian fund files claim against Snapchat

A Canadian investment fund that specializes in acquiring telecommunication companies has filed a statement of claim against Snapchat Inc. for allegedly infringing on one of its patents.

On Monday, B.C.-based Investel Capital Corporation filed a statement of claim in the Federal Court of Canada against Snapchat alleging the infringement of a patent used within “iFramed,” a mobile app designed by Teliphone Navigata Westel Communication Inc., which is owned by Investel.

At the heart of the issue is Snapchat’s geolocation filters, which allow users to add extra content onto images based on their location. This means if someone is at a sports event or popular destination, they can take a photo and swipe to overlay colourful text or images that identify the event or place. Snapchat uses these popular geolocation filters as a source of revenue, as companies treat them like advertising the location or brand.

Investel Capital alleges it owns the patent for that geolocation-based advertising technology and uses it in Teliphone’s iFramed, which lets people overlay a sponsored frame to their image based on location while getting paid to do it by companies. So, for example, if you’re at a popular fast food chain eating a burger, you could snap a selfie, add the company’s paid-for sponsored frame and then share it on social media.

“Investel through its wholly owned Canadian subsidiary Teliphone Navigata Westel Communication Inc. is the first to develop and patent an advertising system that allow users to brand their own social media content with user related advertising and information, and then pay those users for posting on social media,” Investel said in a statement.

“We will not stand by and permit other companies or organizations, including Snapchat Inc. to exploit our proprietary technology,” said Lawry Trevor Deutsch, managing partner at Investel, in a press release.

Snapchat did not respond to the Financial Post’s request for comment before time of publishing.

Investel Capital’s Canadian patent (No. 2,887,596) was filed in December 2014 with a priority date of Jan. 2, 2014.

Investel said it is “seeking remedies in the form of monetary damages for past infringement, as well as injunctive relief prohibiting Snapchat, Inc. from continuing to infringe the patent.”