Avigilon Sales Tactics Using Patents

I recently engaged with a consulting engineer who had engaged with Avigilon. He made the comment that he would never buy another product (only Avigilon) as he didn't what to pay patent rights for using analytics on other products. Puzzled I asked him to explain. He stated that Avigilon had informed him that they held the patent rights for video analytics and should he buy another product and use analytics he would have to pay licensing to Avigilon for the analytics. Has anybody else run into this type of marketing? Making claims and the question is are these claims, accurate and enforceable, as a vendor like Hikvision Bosch etc run their own algorithm.


A few thoughts:

"are these claims, accurate and enforceable, as a vendor like Hikvision Bosch etc run their own algorithm."

That others run their own algorithims is not a defense nor an exclusion, under US patent law, where this is most likely to be litigated (if it comes to that). A company cannot claim that they invented something on their own after it has already been patented. It would still fall under the patent.

As for Hikvision and Bosch, they both have license agreements with OV that have been transferred to Avigilon (see Hik announcement here, see Bosch announcement here). That should help protect both of those companies. On the other hand, Avigilon owns many patents, including from others besides OV, plus the current licenses may not cover all OV patents. Either of these means it is possible that Avigilon could claim other patents are being infringed. We mention this because a contact who spoke with Avigilon's CEO told us that this was part of their plan.

As for the consultant, seems silly to me. If anyone is going to owe anything to anyone it will be the manufacturer to Avigilon, not the consultant nor the end user. The only exception would be for Avigilon to sue end users (like Hawk), which is certainly possible but was not done by OV nor would I expect Avigilon to do so (simply because its a nuclear option).

Finally, as for the Avigilon person who spoke with the consultant, a few thoughts. That's some seriously hardball sales tactics. We do have one previous reported instance - Is Avigilon Telling You That Competitor VMSes Violate Their Patents And Lawsuits Are Imminent? Finally, Avigilon (or at least an AVO rep) has said this is not their policy to sell on patent litigation / enforcement. However, it would seem some Avigilon employees are living up to their aggressive reputations.

As for the consultant, seems silly to me. If anyone is going to owe anything to anyone it will be the manufacturer to Avigilon, not the consultant nor the end user.

Actually he doesn't say owe.

He stated that Avigilon had informed him that they held the patent rights for video analytics and should he buy another product and use analytics he would have to pay licensing to Avigilon for the analytics.

Since as you say Hik and Bosch, (and many of the other manufacturers with a few exceptions) have agreements in place with OV, this could be interpreted to mean that you are paying Avigilon already when you buy product from Bosch, since a portion of it goes to the patent licensing fee.

This may be a clever, less threatening way of trumpeting their patent ownership, e.g. "Why pay for licensing fees, Buy Avigilon!"

Redirect to the OP on whether the consultant was implying that an end-user would actually be sued for buying Bosch.

This may be a clever, less threatening way of trumpeting their patent ownership, e.g. "Why pay for licensing fees, Buy Avigilon!"

The average OV settlement was something like 10 cents per channel. It's not a material amount of money, even after the typical 4x marketup between BOM and MSRP. If you bought another brand of camera you'd be paying $1 or less per channel for "patent fees".

If an Avigilon sales person can't sell the product on its own merits, and needs to resort to patent FUD to get the purchase order, they should probably be looking for another job.

"The average OV settlement was something like 10 cents per channel."

Source? :)

A few manufacturers told me that they basically paid next to nothing. However, a few others said they paid a few dollars per channel.

But whatever the settlements were with OV, why would we assume that the price would remain the same now that Avigilon is negotiating?

I'm not entirely sure what your point is here. I am neither arguing that any embedded patent fees are significant, nor that Avigilon should resort to patent FUD.

I am only trying to understand what the Avigilon employee had in mind when he said "have to pay", 1) suing the end-user 2) embedded license fee.

So which way do you think he meant it?

"he didn't what to pay patent rights for using analytics on other products."

I do not know what the consultant thinks, but from 1's description, it sounds like he thinks he (or his customer) is going to get a bill.

Whatever the payment mechanics are, there are 2 key elements to this:

(1) Consultant is motivated to sell Avigilon over competitors because of patent claims

(2) Avigilon employee(s) are using the patent claims to sell

"he doesn't say owe."

OP says the consultant said "he would have to pay licensing to Avigilon for the analytics." That's what I mean by owe.

"this could be interpreted to mean that you are paying Avigilon already"

Agreed, assuming Avigilon does not pursue existing manufacturers for patents not already covered, which should not be ruled out.

"many of the other manufacturers with a few exceptions"

Most manufacturers do not have agreements with Avigilon / OV, e.g., some of the bigger ones include Axis, Dahua, Genetec, Milestone, Samsung. Avigilon reports 19 licensees and since there are more than 38 manufacturers, that would mean most do not have agreements.