Coors Sued for $12.5 Million Over iPhone App

Developer Claims Brewer and Agency Infringed on Its iBeer Feature

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A version of this story first appeared on Creativity-Online by Associate Editor Nick Parish.

NEW YORK (AdAge.com) -- The Cannes Silver Lion-winning iPint application for beer brand Carling is the target of a $12.5 million lawsuit suit against parent Molson Coors Brewing Co. by Hottrix, the developer of the iBeer application. London agency Beattie McGuinness Bungay created iPint.

Wired's Gadget Lab blog broke the story, and included a PDF of the lawsuit, filed Friday afternoon in Los Angeles County.

According to the lawsuit, Beattie McGuinness Bungay contacted Hottrix to license the developer's $2.99 iBeer application, which uses the accelerometer inside the iPhone to simulate drinking a beer. Nevada-based Hottrix, whose application was one of the most downloaded in the iPhone App Store, rejected the request. The lawsuit contends Beattie McGuinness went around Hottrix, creating a near copy of the app, called iPint, from Sweden's Illusion Labs. IPint was released for free, causing iBeer sales to suffer.

Lawyers for Hottrix said that after the developer couldn't reach an agreement with Coors following iPint's release, Hottrix contacted Apple, which removed iPint from the U.S. App Store. The application is still available abroad. The suit asserts there have been more than 6,000,000 downloads of the free iPint.

In an e-mail statement, Jason H. Fisher, a lawyer representing Hottrix, said, "Hottrix is a small mom-and-pop company that takes the protection of its intellectual property very seriously. Hottrix has been developing its digital 'tricks' since it debuted the 'e-Spresso' for the Palm Pilot in 1999."

Clearly iPint's popularity comes from the fact that it shares a central feature with iBeer -- the app appears to fill users' iPhones with beer, which they can then "drain" by tipping the phone -- and only costs exposure to the Carling brand, as opposed to the $2.99 fee for iBeer. The iPint was developed as part of a mini game created for Carling, called Barslide. In it, players help a sliding pint avoid obstacles on the bar, and are rewarded with a frosty virtual beverage. Players don't need the game to use the iPint beer-tipping feature.

The lawsuit stresses the game is only there to mask the theft of iBeer. "On information and belief, the [game] was added to create a false distinction" between the iPint app and iBeer, according to the suit.

Although Hottrix claims Coors is "vicariously liable" for the actions of its agency, Beattie McGuinness, others may also be liable. Hottrix. The lawsuit names "Does 1-10," anonymous entities Hottrix will be allowed to amend once it identifies the parties responsible. According to the suit, Does 1-10 "may be liable under one or more of the claims in the matter complained of herein."

Inquiries to Coors, Beattie McGuinness and Illusion Labs went unanswered.

IPint was produced by Illusion Labs in Malmö, Sweden, and widely hailed by industry pundits and awards show jurors, who presented it with a Silver Cyber Lion at Cannes this year.

Kevin Arthur, exec VP at digital production shop Firstborn, in an e-mail said his company has seen contracts that would hold it responsible for copyright infringement, should a suit like iBeer vs. iPint go forward. "While I'm not an attorney (much to my mother's dismay) the issue of third-party infringement is one we've come across from time to time in our contracts with our clients," Mr. Arthur said. "If, in fact, Illusion Labs has an agreement with Beattie McGuinness Bungay in which they warrant that their work will not infringe upon the rights of a third party, they could potentially be on the hook for the lawsuit filed by the iBeer people.

"In instances in which an agency comes to us with an assignment to execute and extend upon an idea they already have in place, we've pushed back with the legal terms if they ask us to take on an unfair amount of risk. We certainly warrant that our part of the work is original but as far as any third-party claims, there's a danger as exemplified by the iBeer case."

Until recently, agency network TBWA had been in talks to acquire Beattie McGuinness, which was founded by former TBWA London creative head Trevor Beattie in 2005. Talks between TBWA and Beattie McGuinness came to a sudden end Friday, the day the lawsuit was filed.



iBeer Demo Video



iPint Demo Video
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