ObjectVideo $18 Million Patent Licensing Revenue, Avigilon Reveals

By: John Honovich, Published on Mar 03, 2015

ObjectVideo is making millions on patents.

And Avigilon will now look to build on that momentum.

New financial disclosures as part of Avigilon's OV patent deal shows this. In this note, we break down the financials and examine what this means for manufacturers and the industry at large.

Business *********** ******

******:********'* ******** *********** ********* *** ** ****** deal.

Key ********* *******

** *** **** *.** years (**** - ** 2014), ****** ***** ****** licensing ******** ********* ~$** million ***** ******* ****:

  • $*.* ******* **** *******
  • $*.* ******* **** *******
  • $*.* ******* **-** **** revenue

** **********, ******** *** profit/loss ****:

  • ****: $*.* ******* ******** and $*.* ******* ****
  • ****: $*.* ******* ******** and $*.* ******* ****
  • ****: $*.* ******* ******** and $*.* ******* ******

****, **** *** *** initial **** ** ********, reflecting *** ******** ********.

** ******* *** ************ majority ** *** ******** herein *** *** ********** / ***** ********.

Few ************* - **% ** *******

**** * *** *************, likely *, ******* *** ~**% of *** ******* ********* so ***.

  • ** ****, *** ************ paid ** ~$*.* ******* USD, ************ **% ** the ****'* *******.
  • ** ****, *** ************ paid ** ~$***,*** ***, representing **% ** *** year's *******.
  • ** **** (**-**), *** manufacturers ******** **** ** $6.2 ******* ***, ************ 84% ** *** ****'* revenue.

** / ******** ******** cites ** ********, *** a ******** ** ***** represent ****** *** ** the *******. *** *** top ****** ************* *** is *** *********.

**** *** ******, ** believe ***** *** *** lump-sum ********, ****** ********* 10+ ***** ** ****** coverage ****** ******** *******, meaning **** **** *** unlikely ** **** ** pay ***** ** *** future.

Impact *** ********

***** ******* ** ********* by * *** ********, it ** **** ** project **** **** ***** for ********'* ****** ******* stream. *** *******, ** 2015, **** **** *** one '*****' ******* ** 5 ** *? *********** this ** *** ******* who *** ************* *** already **** *** (*.*., if **** *** ***** it ***** ** **** to ******** **** ***** manufacturers ** ************* **** might ***).

*******, ***** *** **** of *************, *** ** Avigilon *** ****** ~$* million **** **** ** them, ** **** *** take **** **** ** pay **** *** $** million *********** ****.

***********, ***** *** ****** of *** ********, ** might ** ********** *** a ****** ************ ** spend *** ***** ** try ** ********** *** Avigilon ******** ******* *****-*********** *******.

Comments (2)

Who the top paying manufacturers are is not disclosed.

Though one of the lower paying ones appears to be Avigilon themselves:

To eliminate intercompany royalty revenue and costs between the IP division and the Company of $41 for the nine months ended September 30, 2014 and $nil for the year ended December 31, 2013 for licensing agreements that existed before the close of the Transaction.

Paying only a modest $41,000 (CAD), while others paid millions (USD).

Nonetheless, given the amount of the payments, it might be worthwhile for a larger manufacturer to spend the money to try to invalidate key Avigilon payments through the re-examination process.

Could be a tough battle, the patents successfully emerged from re-examination last summer.

Good find on the Avigilon amount. Presumably, they were paying licenses on a per camera basis, rather than a lump sum.

However, the acquired VideoIQ business was doing ~$20 million revenue the previous year, so the licensing amount would not be very significant compared to the revenue.

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