I have had an issue trying to scan both my e36 cab when i had it and an e39. What i didn't realize is that you need to have the key on and the obd-II cover on (i think it actually shorts out two of the pins when it's on if i remember correctly) before you hook up the tool.
Try turning the key on, removing the cap and hooking up your tool and trying to scan. My POS tool would just give errors and I didn't figure out the relationship for a while but have had no issues with any obd-II bimmer i've scanned since.
Currently: 2002 C5 Z06, 2009 335i, 2012 M796, 1976 XS650
PM me for your sidewinder (laser cut) key blank and cutting needs. Have OEM pre-ews keys and replacement shells. Can do (almost) all BMWs up to 2008!