ADT Sued: Remote Monitoring Patent Lawsuit

A powerful IP licensing firm has sued ADT and a number of remote monitoring providers for patent infringement. The firm, Walker Digital, claims that ADT and other surveillance companies violate their patent for an 'Internet Surveillance System' that they originally filed in 1998.

Walker Digital is a powerful force in patent enforcement. They are the company behind the Priceline patent and claimed to have generated over $200 million USD in patent licensing for their hundreds of patents. Walker Digital also recently filed suits against Google, Groupon, Facebook, etc. in cases unrelated to their surveillance patents.

Remote monitoring is widely viewed as one of the next big things. ADT is one of the leading promoters of this service. Remote monitoring holds the promise of reducing expenditures on guards and providing a surveillance service with strong, clearly demonstrated ROI. Interestingly, remote monitoring also greatly benefits from video analytics for generating alerts. Analytics themselves are under attack from patent lawsuits (review the OV analytics lawsuit campaign).

The case was filed this week and also names publicly traded Iveda Solutions and retail provider Westec, among others. We will continue to update as the lawsuit makes its way through the court system.

UPDATE May 4, 2011: In the comments section, two industry veterans make the case that significant prior art exists that should invalidate the Walker Digital patents. Read the comments for full details.

[premium_content]

Background

For details, we recommend reviewing the following:

• The 24 page Court Complaint / filing [link no longer available]
• Patent 6720990 'Internet Surveillance System and Method' - this is the oldest (1998) and most fundamental of the patents filed
• Other patents cited in the case include 7602414, 7605840, 7719565, 7817182 - these all look to be continuations or expansions of the 'original' 6720990 patent

The key claim made in the complaint is that these providers, including ADT, are 'making, using, importing, offering for sale and/or selling remote and Internet monitoring and surveillance products and services.' The complaint repeats this for each named defendant and for each patent cited.

The Patents

Looking at the 1998 patent, here are key clauses that might impact the surveillance industry:

• Server use: Assumes the use of a central server: "a central server to manage remote monitoring tasks performed by users of a data network"; It's likely that all production remote monitoring services use a central server (or servers).
• Payment required: Assumes payment for the service: the service "caus[es] a payment to be provided to the remote viewer, wherein the payment is in exchange for time the remote viewer spent viewing at least the image." This essentially eliminates all forms of self-monitoring. For example, if you have a VMS and are monitoring it from your home or phone, etc., this does not appear to be covered.
• Self-Monitoring Excluded: Acknowledges that self-monitoring software existed before their patent application. They cite a few examples such as PriVID and Novex Canada. This is further indications that regular remote monitoring software is not threatened.
• Key process: Here is the key process that they are claiming to have invented: "receiving a request from a user of a user device to monitor a remote location; determining a remote location to be monitored; enabling communication between a sensor at the remote location and the user device; and crediting value to the user for monitoring the remote location in accordance with an amount of time the user device has been in communication with the sensor for remote monitoring purposes." Most of this description describes today remote monitoring services very well.  One aspect that might be disputed is paying for an 'amount of time'. Many providers charge a flat rate per event. However, a court may judge that a flat rate falls under that meaning.
• Public Monitoring application: An alternative "embodiment of the present invention is directed to a commerce-based system and method that enables members of the general public who have access to a data network such as the Internet to log on at any time and perform remote monitoring tasks for value." This would appear to directly target what InternetEyes is doing in the UK.

Initial Observations

A few observations from our initial review:

• Traditional remote monitoring software and self-monitoring appear to be safe from this patent threat.
• 'Regular' VSaaS providers are unlikely to be impacted as these companies generally provide no monitoring services. The provider stores and provides access but does not monitor or respond to particular events.
• A number of fundamental remote monitoring processes are described in this process and could pose a threat to providers charging for remote monitoring.
• The age of the patent (1998) is a cause for concern. That's fairly ancient in video surveillance terms and while there were certainly remote clients for DVRs whether any prior art exists of paid for remote monitoring services is questionable. Westec reports being founded in 1996 [link no longer available] so they may use this to prove 'prior art'.
• Walker is a sophisticated company with a track record in pursuing patent infringement cases. They cannot be dismissed as a 'crazy' patent troll.
• We do not think this will present any serious long term harm to remote monitoring. Worst case, the providers will pay a license or royalty. Only a few have generated significant revenue in the past (e.g. Westec) so any damages should be minimal for most. For new providers, the overall business model of remote monitoring is healthy enough that adding licenses should not be significant.