AD to Pay Patent "Protection Money" to OV

ObjectVideo has signed a global patent licensing agreement with American Dynamics. This falls in the midst of Object Video's ongoing global litigation campaign against industry notables Bosch, Samsung and Sony. In this note, we examine the agreement and why we see it as little more than 'protection money'.

On the one hand, OV claims that they "have developed a highly regarded software product" and that manufacturers can "partner with them for software product."

On the other hand, in the very next paragraph, American Dynamics says that as they are "developing a broad range of [their own] video analytics-enabled products ...  it was important to ensure that the growth we expect from these products would not be negatively affected by legal issues."

No Use of OV's Products

We confirmed with American Dynamics that they are not using Object Video's products. AD makes it clear:

"We have no plans or intent to use/embed OV analytics in AD products now or in the future. We have a talented group of analytics engineers and PhD’s on staff with more than a decade of experience tuning video analytics for security applications – our analytics will be built in-house leveraging our understanding of what it takes to make great products for security teams that are easy to install and configure for integrators."

Essentially, American Dynamics is simply paying for protection against future litigation Object Video might level against them.

Low Respect for OV's Analytics

That American Dynamics is taking this approach is unsurprising. As we have noted for years, OV's analytics are not well regarded for quality nor performance. Indeed, in our recent favorite video analytics manufacturer survey, Object Video (including partners) were completely shut out.

Good Deal for OV

That noted, American Dynamics is clearly the biggest name to agree to terms with OV since the litigation campaign started. Prior to them, OV had only announced patent agreements with a series of poorly known companies. Having a Tyco business unit acquiese to OV is a good validation sign that a sophisticated player believes OV has a good chance of enforcing its patents long term.

However, OV still faces ongoing battles within its US ITC complaint, most recently a fight with Samsung about misuing Samsung's source code as well as an extension of the target date for completion into 2013.