A lawsuit filed last week could prove problematic for a promising L.A.-area startup.
Pitney Bowes Inc., a major manufacturer of equipment for the packing and shipping industry, has accused Zumbox Inc. of infringing on several of its patents.
Zumbox, a 35-employee company in Westlake Village, provides a Web-based platform that allows for the digital delivery of mail. Zumbox has created an online mailbox dubbed a “zumbox” for every physical address in the United States, including post office boxes.
Subscribers sign up with Zumbox to activate their digital mailboxes. Then advertisers, banks, health care providers and government agencies can send digital mail such as notices, statements and advertisements to the zumboxes. Zumbox intends to make money by having ad and marketing firms pay 5 cents per piece of mail. The other types of mail are free.
Pitney Bowes, a publicly traded company based in Stamford, Conn., with a market cap of $5 billion, alleges that Zumbox’s technology infringes on three patents. One of them, issued in January, covers a process that allows digital messages to be sent to recipients based on their physical mailing addresses. The other two patents, which were granted several years ago, cover technology that streamlines the process of sending and receiving of digital messages.
Pitney Bowes is seeking an unspecified amount of damages from Zumbox.
Donn Rappaport, Zumbox chief executive, disputes Pitney Bowes’ allegations.
“We are confident that Zumbox is not in violation of, or infringing on, Pitney Bowes’ patents in any way,” Rappaport said in a statement issued last week. “We are just now reviewing the suit to better understand their motives.”
The suit is significant because if Pitney Bowes prevails, it has the potential of crippling Zumbox, said Joseph Trojan, a patent attorney at Trojan Law Offices in Beverly Hills who is not involved in the case but reviewed it at the Business Journal’s request.
“If this is their only product and they cannot design around the patent, then they’re in deep trouble,” Trojan said.
One way that Zumbox could defend itself, Trojan said, would be to show its technology for routing digital mail is different from the one in Pitney Bowes’ patents.
Pitney Bowes spokesman Matthew Broder wouldn’t comment in detail about the lawsuit.
“It’s a straightforward allegation of infringement,” Broder said. “We don’t get into motive.”
While Pitney Bowes has patents for paperless mail technology, the company has not launched any products yet, Broder said.
Zumbox has recently reported positive developments. In the past two months, the mayors of San Francisco, New York and Newark, N.J., have all announced their governments will send some official mailings to residents via Zumbox.
In August, Zumbox raised $8 million from a group of investors that included Michael Eisner, the former Walt Disney Co. chief executive who now runs investment firm Tornante Co. in Beverly Hills.
