The QR Code — Denso Wave's 2D Code and the Patent It Chose Not to Enforce

The QR code is a two-dimensional code announced in 1994 by Denso Wave, then a division of what is now Denso Corporation. QR stands for "quick response", expressing the design goal of high-speed reading. The developer in charge was Masahiro Hara.

One reason the QR code spread from factory parts tracking to mobile phones, shop counters and pandemic venue check-ins is that Denso Wave, while holding patents on it, decided not to exercise them for the standard code. The company says this was decided from the very beginning of development.

Starting from the barcode's limits

As Denso Wave tells it, the starting point was the barcode. Supermarkets spread during Japan's high-growth era, and barcodes and point-of-sale systems took hold to spare cashiers from keying in prices by hand. But a barcode can hold only about 20 alphanumeric characters. Denso Wave, which was then developing barcode readers, was asked by users for codes that could hold more information and could encode kanji and kana as well as alphanumeric characters.

Hara recalls that developers of 2D codes at other companies were all preoccupied with packing in as much information as possible. He set out to make a code that could hold a lot of information and also be read easily, and began with a team of just two.

1:1:3:1:1: the position-detection marks

The hardest problem was speed. Hara's idea was to add positional information telling the reader that a code is here. That became the square position-detection patterns in three corners of every QR code.

Why squares? According to Hara, "it was the pattern least likely to appear on various business forms and the like." A similar mark nearby could fool a reader into mistaking it for the code, so the team reduced pictures and text printed on fliers, magazines and cardboard boxes to black and white, surveyed the ratio of black to white areas for days on end, and found the ratio least used in print: 1:1:3:1:1. By searching for that ratio, a reader can find the code's position and orientation from any angle through 360 degrees.

A patent not enforced

Denso Wave holds many patents on the QR code. It has also declared that it will not exercise them for the standardised code. Its patent page says: "Everyone can use the QR Code freely as long as following the standards for QR Codes in JIS or ISO." Anyone considering a code that deviates from the standards is asked to check with the patent holders first.

According to its FAQ, commercial use requires neither a fee nor a licensing contract. The words "QR Code" are a registered trademark of Denso Wave, but the trademark covers only the words, not the QR code pattern itself.

Denso Wave presents this policy as honouring the developers' wish that as many people as possible could use the code, and says that because it could be used at no cost and without worry, the QR code grew into a "public code" used around the world. When the QR code won a Good Design Award in 2012, the citation praised the foresight of placing its technology in the public domain from the early stages of development.

Becoming a standard

Industry came first. The automotive industry adopted the code for electronic kanban, managing everything from production to shipping to transaction slips, and food, pharmaceutical and contact-lens makers used it to control their merchandise. After the BSE crisis raised demands that food production and logistics be made transparent, a code that could hold a lot of information became especially useful.

On 17 June 2014 the QR code development team received the Popular Prize, chosen by public online vote, at the European Patent Office's European Inventor Award. According to Denso it was the first win from Japan. The team was five people: Masahiro Hara, Motoaki Watabe and Tadao Nojiri of Denso Wave, and Takayuki Nagaya and Yuji Uchiyama of Toyota Central R&D Labs.

Phones bring it to the public

According to Denso Wave, the QR code reached the general public in Japan in 2002, when mobile phones with a QR reader went on sale. Being able to open a website or get a coupon just by scanning an eye-catching pattern made it popular. Japanese phones of the time were already well used to going online from the handset, through services such as i-mode. Today the code appears on business cards, electronic tickets and airport ticketing systems.

A way to pay

The QR code later became a way to pay at the till.

China — In a September 2019 report, CGAP wrote that much of the growth with which Alipay and WeChat Pay remade China's mobile payments had taken place on the back of QR codes, and that by 2016 more than $1.65 trillion in transactions used the codes. CGAP lists cheapness and ease of adoption for both customers and merchants among the advantages, and says the two companies tested other technologies, including near-field communication, before opting for QR.

Japan — PayPay launched on 5 October 2018. According to Impress Watch's report on its fifth anniversary (5 October 2023), registered users passed 60 million in five years, and PayPay said it held about 67% of Japan's code-payment market by both value and number of transactions in 2022. Reporting the Payments Japan Association's Cashless Roadmap 2024, Impress Watch (26 December 2024) gave Japan's cashless payment ratio for 2023 as 39.3%; by value, credit cards made up 83.5% and code payments 8.6%, and code payments grew fastest, by 37.5% year on year.

Venue check-ins in the pandemic

COVID-19 gave the QR code another role. On 24 September 2020 the UK government announced the launch of the NHS COVID-19 app in England and Wales. One of its features let users check in at a venue by scanning an official QR code displayed there, and alerted them if someone who had been at the same place later tested positive. From that day certain businesses in England were required by law to display official NHS QR code posters; by then more than 160,000 businesses had already downloaded the codes.

Afterwards

Hara has said that black-and-white codes have become so mundane that he would like to create more spectacular ones. The code's place in the story of the phone is on the mobile phones and smartphones timeline.

QR Code is a registered trademark of DENSO WAVE INCORPORATED.