Avigilon Acquires 96 MORE Patents

By: John Honovich, Published on Jan 21, 2015

Spending $80 million on patents last month was evidently just the start.

Now, Avigilon has acquired 96 more patents from 4 different companies.

In this note, we examine this high risk / high reward strategy and how it can impact rivals and the industry at large.

Deal ********

************* $**.*** ******* ****** 96******* ******* *** ** applications **** * *********:

*** ****- *** ******** ********* company *** ******** $*** ************* ** ************* *********
********** [**** ** ****** available] - * ******* / **** **** ** no ****** *********, ** developed
**** - * ******* without **** ** * web ******** *** **** held ******* ** "***** ******* ****** ******-**-*-****"
***********- * ***** ****** analytics *********

***** ******* **** ************ acquired *** *** *********. A ****** ******** ********** filing *** ******* **** details.

Patents ** * ******

**** **** ******* ******* that ******** ******* ** use ******* ** * competitive ****** ** **** their ******. *****'* **** no ***** **** ****** to ***** ****** $*** million ** ******* **** 5 ********* *********. *** level ** '**********' ** huge *** ****** ** returned ******* ******* ********** threats *** ***** **** a ****** ** **** to *** **** ************** *********.

*** **** *** ******** can ******** ******** ******* in *** **** * to * ***** **** these ***** ** ** use ** ** ***** / *****-*** *********** *** large ***** *** ** end ************ *****. **** is, ** ******, *** primary ******** / ******* focus ******. ****** ***** patents, *** *********** *********** with **********, *** ****** result ** ********* **** patent ********* ** ******** that ******** **** *** overall *******.

High ****

***** ** ******* ******** can ******* **** **** strategy, ** ********* *** high ****.

*****, ******** ********* **** shown ********** *** ***** term *************. *** **** Avigilon *** ***** **% of ***** *** ***** (including ***** **** *** raised ** ****** **% over ***** ***** ***** currently), **** *** ***** to **** ** **** investors **** **** ****** can ******* ******* *******.

********, *** **** ** these ****** ***** **** do *** *** ******* it ******* **** ******** is ***** ** *** these ******* ** **** their ***********, *** ******* the *********** **** *** or **** ****** ** fight ****, ****** ** invalidate *** ****** ******. On *** ***** ****, so *** ************ ************* have ******* ******* ** quickly ***** ******** **** *** ****** trolls *** ******* **** have *****.

Comments (33)

Scot MacTaggart

01/21/15 04:25pm

I'm very interested in the BRS Labs development...specifically in which patents if this sale doesn't cover all of them. From a distance I've always admired the ambition of BRS Labs, but I've thought that they needed to integrate their sales pitch into the same presentations as their partner VMSes in order to move inward from the fringe.

If Avigilon can bake BRS tech into Avigilon Control Center software, then adoption could take off in a way that it couldn't otherwise. Looking forward to learning more about what this really means.

John Honovich

IPVM | In reply to Scot MacTaggart | 01/21/15 04:30pm

Scot, on this announcement, Avigilon was quite limited with details. However, in their description of the OV deal, the point of acquiring patents was not about technology at all. Indeed, there is no reference to any technology / software acquisition from BRS or any of the other 3 companies in this announcement.

Now maybe Avigilon releases their own behavioral analytics and use these patents as legal protection. We'll have to see how that develops.

Undisclosed Manufacturer #1

01/21/15 04:28pm

Patent war building up for sure! With so many smart city projects coming up, I certainly see Avigilon trying to block many vendors from competing.

Keefe Lovgren

IPVMU Certified | 01/21/15 04:32pm

interesting article, I am looking forward to seeing what becomes of all of this... excellent use of mr. burns by the way :)

Undisclosed #2

In reply to Keefe Lovgren | 01/21/15 06:02pm

excellent use of mr. burns by the way :)

No, it is both outrageous and unfair; Mr. Burns deserves an apology, pronto.;)

Ethan Ace

IPVM | 01/21/15 07:14pm

While I think it's far more likely they'll just use it to sue, if Avigilon did develop something with those BRS patents...just imagine the marketing!

With a 29 megapixel camera you can replace 95 analog cameras, but one behavioral analytics license replaces 95 operators!

John Honovich

IPVM | 01/22/15 11:32am

BRS Labs has issued a statement regarding the sale:

"In the process of maintaining the value of the company for shareholders, BRS Labs has sold a portion of the intellectual property associated with the AISight 4 legacy product to Avigilon. BRS Labs will continue to sell and support AISight 4 along with all other existing products."

Related in the statement:

"We have worked diligently over the last two years to re-engineer the AISight platform to make it applicable to all forms of data analytics, including, but not limited to video. The release of AISight 5 has already enabled us to move into the SCADA and information security markets while we continue to offer our industry-leading video analytics solution"

Undisclosed Manufacturer #3

01/22/15 02:55pm

Forget the industry for a second, when will an interested government step in? Do you think for a moment that the world will simply let this one Canadian company rule all video survelliance and start demanding fees from everyone including end users. All it will take is some sort of patent troll piracy legislaton due to a particualr governments national security interests and then lets what happens to all that investment? There is so much Prior Art out there going back a long way... if anyone payed attention.

Now, where is SIA when you need them? Or has Avigilon's actions made them irrelevant?

John Honovich

IPVM | In reply to Undisclosed Manufacturer #3 | 01/22/15 02:58pm

"Now, where is SIA when you need them?"

Now that's funny! I do think it should be SIA's job to deal with this, as they are the trade federation for manufacturers but I am not hopeful given their woeful record.

But I agree, someone should step in.

Undisclosed #2

In reply to John Honovich | 01/22/15 06:05pm

Step in and do what exactly? Avigilon acquiring patents alone isn't illegal. Assumedly anyone else could have bought these patents but chose not to. In any event patents are a form of legal monopoly, and therefore by their very nature are anti-competitive.

But these patents seem like a gamble since, AFAIK, none of them have been tested by a full blown trial and decision. The closest was Techwin's win, which suggests that they are not impervious.

Avigilon has to be careful in getting the maximum value out of these patents. Pushing too hard is reckless. All it takes is one ruling of the primary patent(s) being invalid and there goes $80 million price plus the recurring licensing revenue stream...

A suing spree will likely get them that test.

John Honovich

IPVM | In reply to Undisclosed #2 | 01/22/15 06:09pm

"Step in and do what exactly?"

Pursue invalidation of key claims of key patents. Multiple manufacturers pool together such that the request for validation does not get terminated if any of them settles for a sweet deal from Avigilon. Ergo, exactly what we discussed here.

Agree/disagree?

Chris Dearing

IPVMU Certified | In reply to John Honovich | 01/22/15 06:32pm

My bad. To me "Step-in and do something about it", had the sound of an entity with authority/jurisdiction taking some action, not a collective.

I do think that next round the defendants will be far more motivated in the defense. Whether in this round they can pre-emptively band together and seek relief thru declaratory judgement is another matter, though.

Remember they all have confidential in-force agreements with OV/AV in place, and are bound to those for some unknown term. So it might not be an option until AV tries to squeeze somebody on the next agreement.

By the same token, it's unclear to me how AV could use their patents at the deal level, since these agreements explicitly allow, say Bosch to use the technology.

John Honovich

IPVM | In reply to Chris Dearing | 01/22/15 06:39pm

"it's unclear to me how AV could use their patents at the deal level"

OV / Avigilon has agreements with 19 manufacturers out of ~500. And even if that 19 represents a disproportionate amount of the market, I'd estimate a good 50% of the market, by revenue, is not covered by them, including most video analytic specialist developers.

Chris Dearing

IPVMU Certified | In reply to John Honovich | 01/22/15 07:03pm

And even if that 19 represents a disproportionate amount of the market, I'd estimate a good 50% of the market...

Wait a sec, what market are we talking about? The video analytic market? If so, then yes I agree Avigilon is in a good position to use their patents against the "video analytic specialist developers".

I may have misunderstood but I thought the real threat of the 800 pound troll patent owner was to muscle out Milestone or Sony, in a bread and butter VMS/camera deal by claiming that the motion detection, for instance, works by creating meta-data, and so was infringing. Isn't that the overwhelming concern here?

But is there a threat to pure-play analytic deals? Sure.

John Honovich

IPVM | In reply to Chris Dearing | 01/22/15 07:14pm

"muscle out Milestone or Sony, in a bread and butter VMS/camera deal by claiming that the motion detection"

From what I have seen, that is not it, if only because basic motion detection was not part of OV's portfolio. Wait until Avigilon buys Canatelo's patents....

What I believe is most likely is that real video analytics become an issue in mega-deals, x thousands of cameras in a city, x tens thousands of cameras in a big box retailer. A lot of those analytics come from smaller companies that did not have an OV patent agreement. Avigilon can use the patents as a way to get the upper hand on the analytics business and, hopefully for them, to work in their cameras, recorders, etc.

Chris Dearing

IPVMU Certified | In reply to John Honovich | 01/22/15 08:44pm

Wait until Avigilon buys Canatelo's patents....

Don't give them any ideas... ;)

Scot MacTaggart

In reply to John Honovich | 01/22/15 06:42pm

I think the only manufacturers who would be willing to play that game are the ones that don't have any patents of their own, and don't intend to claim any in the foreseeable future...in other words, the people who wouldn't be worried about an in-kind response or an overall increase in industry ruthlessness where patents are concerned.

Seems like a very small number of major manufacturers to me.

John Honovich

IPVM | In reply to Scot MacTaggart | 01/22/15 06:47pm

It's not a game. Bosch filed to invalidate OV's patents. Axis filed to invalidate Cantelo's patents. Avigilon sought to do the same.

Invalidation is a core counter tactic to aggressive patent 'enforcers'.

Normally, manufacturers would not bother because most companies never enforce or threaten to enforce their patents so it's not worth the effort.

Scot, let me ask you: Do you think Avigilon is going to enforce these patents against competitors in the next 3 years?

Scot MacTaggart

In reply to John Honovich | 01/22/15 07:10pm

Despite the fact that we were talking about the industry association making this move, and not individual firms, your question cuts right to the heart of the matter, and my answer is a qualified "yes".

I should clarify that I have no inside information to share despite my company's relationship with Avigilon, so these are just my thoughts...not facts or even speculation based on facts from within that company.

They will enforce the patents. They have to. But I think the likelihood that a manufacturer will run afoul of them just went way down. People in the industry know the history of the OV patents, and how they have yielded dividends...and they think they know that Avigilon will ruthlessly enforce the patents, thus reducing the need for actual enforcement.

Back to the original question of whether SIA will get involved: absolutely not. That'd require too much coordination between major manufacturers with their own patent portfolios and legal considerations to think of.

TL;DR: Yes, Avigilon will enforce their patents, but will not have to worry about SIA stepping in, and manufacturers are more likely to avoid these suits now than ever before, IMHO.

John Honovich

IPVM | In reply to Scot MacTaggart | 01/22/15 07:18pm

I agree, I would be stunned if SIA does anything, even though I think it is in the 'security industry association' interests to do so.

I also agree that the initial tendency will be avoidance. Surveillance manufacturers are a timid bunch, as a whole, of course, with the massive exception of Avigilon.

Ultimately, I am curious (1) how much Avigilon will ask for licenses and (2) if they flat refuse to license to certain competitors. Both of those will ultimately show how much an impact this will have.

Itamar Kerbel

01/22/15 09:43pm

I really belive that there is a little to much fear here.
My guess is that Avigilon is taking both a defensive approach and hints about future developmetns that it has in store.

For the most interasting thing here is the betting and rebetting on the future of the CCTV market in the next few years.

They are just betting and rebetting that its going to be harder and harder to sell hardware for the prices they demand without having something to make them really stand out of the HV and DA crowd.

As we all know the waek point of the hardware coming from China is software and maybe they are just trying to justify the price of an Avigilon camera/system by giving more to the end user.

John Honovich

IPVM | In reply to Itamar Kerbel | 01/22/15 09:50pm

"My guess is that Avigilon is taking both a defensive approach"

Itamar, so they spent $93 million - 60% of their cash and 33% of last year's annual revenue for defensive purposes? How can they justify that much spending?

Itamar Kerbel

In reply to John Honovich | 01/22/15 10:12pm

Don't get me wrong.

I'm sure they expect to make money out of the patents.
The same guys who paid OV up until now will now pay them.

What I am saying is that I don't think they will go and sue everyone in the market.
They will base most of the near future develpment on analytics and block others from doing the same.

I just don't see them trying to sue anyone who already has somkind of analytics in the VMS camera.

John Honovich

IPVM | In reply to Itamar Kerbel | 01/22/15 10:15pm

"They will base most of the near future development on analytics and block others from doing the same."

If they try to block others and those competitors refuse, will they just let them go or will they sue?

Itamar Kerbel

In reply to John Honovich | 01/22/15 10:19pm

I'm sure that if competitors will try to "copy" future developments of Avigilon. Avigilon will not hasitate to sue. By defensive postion I mean defend future analytic development.

That said - Its only my opinion and I might be in for a surprise...

John Honovich

IPVM | In reply to Itamar Kerbel | 01/22/15 10:22pm

Itamar, so we are clear, Avigilon is buying up patents that cover fundamental elements of video analytics. OV has claims / coverage on calibration (manual or automatic), tripwire, generating metadata, etc.

What Avigilon now owns are patents on the very basics of pretty much any analytics, not specific future developments of Avigilon.

Itamar Kerbel

In reply to John Honovich | 01/22/15 10:27pm

"What Avigilon now owns are patents on the very basics of pretty much any analytics, not specific future developments of Avigilon."

As I said I might be wrong :)

John Honovich

IPVM | In reply to Itamar Kerbel | 01/22/15 10:31pm

And I should have done a better job explaining what the patents consist of! :)

Ethan Ace

IPVM | 01/22/15 10:32pm

Let's say Avigilon did intended to actually develop product covered by these patents. They would still have a huge R&D investment ahead of them, no? We're not talking source code. We're talking about patents. Patents are not products. They didn't go to BRS Labs and buy AISight. They bought the patents which cover AISight.

So if they just spent almost $100M on patents, do they really have budget left for real R&D involving them? Their analytics engineering depth is basically whoever is left from VideoIQ, right? It seems like they'd need much more staff in place to recoup $100 million selling analytics licenses.

John Honovich

IPVM | In reply to Ethan Ace | 01/22/15 10:36pm

They still have ~$60 million in cash (presuming they don't buy any other patents next week :). They also have nearly $300 million revenue to help fund that development.

So I think they could dedicate non-trivial resources to analytic development. However, many others have done this before so the differentiator here would be the patents that could help clear out competiton.

Itamar Kerbel

In reply to Ethan Ace | 01/22/15 10:51pm

Ethan has a good point but my guess is based on the fact that VIQ was bought 1 year ago. And in the year before that VIQ did not come out with any new products.

The only thing that came out in the last year is the killing of a lot of VIQ old products and the coming out of the VIQ tech in the Avigilon cameras.

While I don't see this as trivial we did all expect it to happen. My guess is that in the last year they had at least planned the future of analytics in Avigilon other than just creating a new Avigilon+VIQ products.

Undisclosed End User #4

01/23/15 01:26am

BRSLABS is the key for them!!!!!!

John Honovich

IPVM | 01/23/15 02:01pm

Video Mining issued a short statement, saying that they "recently completed the sale of multiple non-core patents to the Canadian video surveillance company Avigilon. The sale continues to reflect the technology leadership of the VM Labs team, affirming the work the team has been doing in the field of video behavior measurement analytics."

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