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Martech firm Mad Labs sues Nestlé RM139m for ‘unlawful use’ of QR code

Nestlé Products, the fully owned subsidiary of Nestlé Malaysia, is being sued by R&D company Mad Labs for approximately RM139.34 million over the “unauthorised and/or unlawful use” of its QR code on its packaging. According to the Bursa filing, Mad Labs is alleging a breach of an implied contract between it and Nestlé by reason if the latter’s continued use of the QR code. The statement also added that there was “unjust enrichment” of Nestlé by the use of the QR code.

As such, Mad Labs is pursuing a declaration that Nestlé has wrongfully and/or unlawfully utilised or printed its QR code on its products and/or packaging, and is liable for the losses and damages Mad Labs suffered. Mad Labs is also requesting an order and/or an injunction for Nestlé to remove its QR code from all its products and packaging. Additionally, the R&D company is also seeking general, exemplary and/or aggravated damage.

Nestlé said in the Bursa filing that Mad Labs’ claims are “not justifiable” and it will be contesting the claim. It added that its solicitors Messrs. Zaid Ibrahim & Co. “is of the preliminary view that [Mad Labs’] claim is without merit and that Nestlé Products has strong grounds to defend against its claim”.

Last year, Nestlé’s spokesperson told A+M that it filed a police report after experiencing an “unlawful attack by irresponsible parties” hoping to discredit its reputation. The move came after QR codes on some MAGGI products, such as cup noodles, allegedly linked consumers to offensive and sexual content, including online gambling sites. The spokesperson said the QR codes were found to be diverted by a third party agency to offensive content and possible malware when scanned, instead of Nestlé MAGGI Malaysia’s website. Videos circulating online at the time of writing then showed Mad Labs to be the third party agency.

Shortly after, the Malaysian Communications and Multimedia Commission shut down the domain site madlabs.com.my but later lifted the suspension after being informed that the site was under maintenance to resolve the problem of users being redirected to some undesirable sites.

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