Walmart sues BJ's for alleged infringement on its Scan & Go tech

Dive Brief:

Walmart filed a lawsuit against BJ's Wholesale Club claiming the latter infringed on patents related to its Scan & Go self-checkout function.
In its complaint, Walmart said BJ's Express Pay self-checkout technology was "strikingly similar" and offered "nearly identical functionality" as the company's Scan & Go feature used at Sam's Club.
Walmart is seeking an injunction against BJ's and unspecified monetary damages. A BJ's spokesperson said the company will not comment on pending litigation.

Dive Insight:

Walmart's Sam's Club first rolled out the Scan & Go feature in 2016, allowing customers to scan items with their phones as they shopped and bypass checkout lanes. Walmart said in its complaint that the company began working on the technology more than a decade ago.

Sam's Club still uses the feature today, while Walmart discontinued it in 2018, though its Walmart+ membership incorporates similar self-checkout functions.

The Scan & Go feature reportedly caused friction for customers at Walmart stores. However for Sam's shoppers, Scan & Go "has been well received allowing the customer to shop on their terms and get in and out of clubs more quickly," executives told analysts around the same time.

BJ's Express Pay went live across all its stores in the fourth quarter last year.

"We know that leveraging technology to deliver a more convenient experience for our members is a long-term game changer for our business," BJ's CEO Robert Eddy said of the feature on an earnings call earlier this month, according to a Seeking Alpha transcript. "Our digital assets are changing that paradigm, and we believe our members will increasingly reward us for that."

In its lawsuit, Walmart alleged that its "innovations were simply taken without permission" by BJ's. Walmart also called Express Pay "an apparent copy of Sam’s Club’s Scan & Go, merely changing the in-app colors and changing the name from Scan & Go to Express Pay." The substance of Walmart's complaint revolves around the technological similarity of the two features and how they function for customers.

Scan & Go and other contactless payment methods gained traction during the pandemic, as many shoppers avoided close contact with each other and employees out of health concerns. Walmart has also tested a cashierless store format, a concept pioneered by rival Amazon.