The people who bought part of bust Powa Technologies could face a fight over patents

A division of bust payments business Powa Technologies that was sold last week could face a fight over the ownership of its core technology.

Ensygnia, a Cambridge-based company that makes the payment app Onescan, says it "placed Powa on formal notice of its potential infringement of Ensygnia's IP [intellectual property]" following commercial discussions between the two companies in 2013. It says it has "re-stated that position to Deloitte," which took over as administrator of the company last month.

Ensygnia, which works with the likes of O2, Hewlett-Packard, and PayPal, says it held a "short-term customer-only trial arrangements in 2013" with Powa and "Powa Technologies developed its PowaTag solution from these discussions."

Ensygnia stops short of accusing Powa of infringing its patents but says it "will not hesitate to enforce our rights if we become aware of any infringement." The "formal notice" Ensygnia issued Powa Technologies is a little like a warning shot - it doesn't constitute legal action but is a possible precursor to it.

A spokesperson for 964 Bidco Limited, the company that purchased the UK assets of PowaTag, told Business Insider over email: "As a technology business, we regard the protection of intellectual property rights as a serious matter. If we receive any challenges to our intellectual property rights, we will investigate such challenges and deal with them appropriately."

Administrators Deloitte, who now speak and act for Powa, declined to comment. Powa's founder and CEO Dan Wagner did not respond to an email and call from Business Insider requesting comment. He has been unavailable for comment since Powa Technologies fell into administration.

Multiple former Powa employees have confirmed to Business Insider that they were aware of this issue while they were employed by the company.

Powa Technologies, which also makes online websites for retailers and mobile card readers, fell into administration last month. The company had raised at least $220 million since 2013 but had just $250,000 in the bank by the start of February and debts of $16.4 million.

PowaTag was one of Powa's three main business lines and the technology that the company raised the bulk of its money on the back of. The app is a bit like an e-commerce Shazam - users can buy products by scanning adverts, pictures, QR codes, or audio waves. PowaTag also acts as a central store for payment and delivery details, meaning shoppers can check out in just a few clicks.

Here's a video of PowaTag in action:

Ensygnia's Onescan does something similar, storing address and payment information on the phone. A corporate brochure says: "Onescan acts as a combined digital passport and wallet allowing you to manage your identity and give you total control over your personal data."

Here's a video of Onescan in action:

PowaTag was Powa's flagship product, with the Daily Mail writing in 2013 that it "really gets [Dan] Wagner into evangelical mode."

Wagner, the founder and CEO of Powa Technologies, told The Telegraph in 2014 that he had been working on the PowaTag technology for "years" and said: "Once it's out there, people will try and create alternatives. We don't want to give the competition the opportunity to muscle in."

But PowaTag struggled to gain traction among both businesses and consumers. Business Insider reported that most of the 1,200 brands and companies Powa claimed to have signed up as partners for the app had simply expressed interest in the technology and had not signed contracts.

Since falling into administration, Deloitte has sold off Powa's main UK businesses. PowaTag went to a consortium led by Ben White, and online retail arm PowaWeb to Greenlight Digital. Seventy-five employees were made redundant in the process and an estimated 160 employees internationally are still "in limbo" with no clarity around their future.

Here's the full statement that Ensygnia gave Business Insider on Powa:

Other than in relation to some short-term customer-only trial arrangements in 2013 Ensygnia has not licensed its IP or technology to Powa Technologies. Powa Technologies developed its PowaTag solution from these discussions and, as we understand it, acquired its current software solution from the acquisition of MPayMe.

Ensygnia's IP is a matter of public record and clearly an important asset for the company. Powa is fully aware of the existence of our patents following those earlier commercial negotiations, during which we tried to reach an amicable and fair agreement for Powa's use of our IP.

The situation now is that when the commercial discussions ceased, we placed Powa on formal notice of its potential infringement of Ensygnia's IP. That notice still stands and we have, naturally, re-stated that position to Deloitte.

Of course, it goes without saying that we will not hesitate to enforce our rights if we become aware of any infringement.