Many Kroger and Walgreens stores feature “smart screens” on cooler doors that may “offer coupons, to enhance the shopping experience.” Shoppers in Wakefern stores like ShopRite may see in-store digital displays that can “provide a coupon to the person in real time.” And Brookshire-owned Super 1 Foods stores feature TV screens in checkout aisles that may “provide marketing or advertising information, and offer coupons.”
That’s what a technology company alleges, so it’s filed a slew of lawsuits to get the credit – and the payment – it claims to deserve. And so far, it’s succeeded, at least twice.
Alpha Modus holds several patents for technology that, among other things, can “generate targeted ads” to shoppers based on their demographic data, that can be featured “on digital displays at checkout or through mobile devices to generate promotions.” It also recently pledged to defend those patents, by strategically initiating “patent infringement lawsuits targeting unauthorized use of our proprietary technologies by major players in retail and tech.”
In other words, if retailers use technology that Alpha Modus believes it owns – they’re going to get sued.
The company’s first high-profile patent infringement lawsuit against a retailer has become the latest one to be resolved. 16 months after suing Kroger, Alpha Modus has announced the two sides have come to terms on a settlement agreement, ending the dispute. Alpha Modus had accused Kroger of violating several of its patents, by working with the company “Cooler Screens” to install that company’s digital smart screens in hundreds of Kroger-owned stores. That technology replaces traditional see-through glass cooler doors with opaque digital screens that display images of what’s inside, along with advertisements and product promotions.
Some shoppers think it’s cool, others find it kind of annoying, but Alpha Modus considered it an unauthorized use of its intellectual property. Kroger pushed back and filed counterclaims of its own, before agreeing to settle the case earlier this month. Terms of the settlement were not disclosed; it’s not known if any money changed hands or any licensing agreement was reached. But Alpha Modus appeared pleased. “This settlement marks another important validation of the strength and enforceability of our patent portfolio,” CEO William Alessi said in a statement.
The settlement with Kroger followed a similar outcome in Alpha Modus’ dispute with Wakefern. That lawsuit, filed late last year, accused Wakefern and the technology company Shelf Nine of violating several other Alpha Modus patents. Shelf Nine provides digital screens for retailers like Wakefern to install in checkouts and grocery aisles to display “dynamic content” and “relevant ads to engage and entertain the shopper.”
The settlement in that case, reached in March, did result in a licensing agreement, as the parties negotiated what Alpha Modus called “a strategic partnership for the deployment of Alpha Modus’ cutting-edge technology,” which includes a license for the patented innovations that Alpha Modus says it owns. “While the circumstances of our initial engagement were far from ideal, the outcome is undeniably positive,” Jay Hutton, the CEO of Shelf Nine parent company VSBLTY Groupe Technologies, said in a statement.
That leaves two retail chains with which Alpha Modus remains in litigation. There’s Brookshire, which works with Shelf Nine competitor Grocery TV. And Walgreens, which has also worked with Cooler Screens – and now has yet another reason to regret doing so.
Walgreens first partnered with Cooler Screens back in 2018, years before Kroger did. A few years later, though, Walgreens had second thoughts about rolling out the technology to all of its stores. So Cooler Screens sued, accusing Walgreens of trying to back out on their deal.
That $200 million lawsuit is still ongoing. So not only is Walgreens having to defend itself against Cooler Screens for not using smart screens more widely, it’s also having to defend itself against Alpha Modus for using them at all.
Whatever the outcome of its remaining lawsuits, Alpha Modus has signaled that its fight is far from over. “Alpha Modus believes that numerous companies are currently infringing on its patent portfolio,” the company said in a recent statement. “Alpha Modus remains steadfast in protecting its intellectual property and will take decisive action, if necessary, to uphold its rights.” The settlements reached so far, it says, “strengthen the company’s ability to pursue further enforcement actions and ensures that its innovative technologies are recognized and respected throughout the industry.”
Most shoppers don’t really know or care who’s responsible for the technology that shows them ads and promotions and possibly offers them coupons in stores. Those who created the technology certainly care, though. And it may be up to the courts to make the potentially multimillion-dollar decision, about just who the creators of that technology really are.
Image source: Shelf Nine
