Pitney Bowes Accuses Zumbox Of Patent Infringement

By Ty McMahan, Of DOW JONES VENTUREWIRE

WESTLAKE VILLAGE, Calif. -(Dow Jones)- Pitney Bowes Inc. (PBI) on Tuesday filed a lawsuit accusing privately held Zumbox Inc. of patent infringement.

The suit filed in California Central District Court claims Zumbox, which is developing a paperless postal system, is infringing upon three of Pitney Bowes' U.S. patents.

Traditionally known for its expertise in physical mail, Pitney Bowes recently has expanded its capabilities to include online communications products that link to and run in parallel with physical communications.

Pitney Bowes invested more than $200 million in research and development in 2008, with much of that total dedicated to software products, said Bernie Gracy, vice president of strategy and new business development at Pitney Bowes.

Zumbox has built a postal system that combines features of email and the U.S. Postal Service. The company has created digital mailboxes that correspond to every street address in the country, through which customers may receive digital mail.

"We want to prevent [Zumbox] from using our intellectual property in the commercialization of their service," Gracy said. "We have an obligation to our shareholders to protect those patents."

Zumbox Chief Executive Donn Rappaport said in a prepared statement: "We are confident that Zumbox is not in violation of, or infringing on, Pitney Bowes' patents in any way. Further, we had no prior knowledge of this lawsuit before Pitney Bowes filed the suit and issued its press release today. We are just now reviewing the suit to better understand their motives."

Founded in 2007 and based in Westlake Village, Zumbox has raised about $12 million from investors including Art Bilger, managing member of Shelter Capital Partners; Rick Braddock, chairman and chief executive of Fresh Direct Inc. and former chairman and CEO of priceline.com Inc. (PCLN); Michael Eisner, founder of Tornante Co. and former CEO of Walt Disney Co. (DIS); Bill Guthy, founding principal of Guthy-Renker; and Zumbox CEO Rappaport.

Shelter Capital Partners is the company's only institutional investor. A call to Bilger was not immediately returned.

The three patents at issue are #7,478,140, "A System and Method for Sending Electronic Mail and Parcel Delivery Notification Using Recipient's Identification Information"; #6,690,773, "Recipient Control Over Aspects of Incoming Messages"; and #7,058,586, "Information Delivery System for Providing Senders with a Recipient's Messaging Preferences."

-By Ty McMahan, Dow Jones VentureWire; 212-416-2032; ty.mcmahan@dowjones.com

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  10-13-091922ET
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