Avigilon / Canon New Lawsuits, No Settlement

By: Brian Karas, Published on Oct 11, 2017

In July, Canon sued Avigilon, a notably rare move amongst major players in the industry, including Canon's subsidiaries Axis and Milestone.

At the end of July, Canon notified the court that they were in settlement discussions. It looked, at that point, that this would be the quick end of this conflict.

However, no settlement was reached and now new lawsuits have been filed between the two companies as they angle for advantages in this ongoing dispute. Inside this note, we review these new lawsuits and how this impacts the dispute.

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Comments (25)

Undisclosed Manufacturer #1

10/11/17 05:16pm

One Object Video Lawyer to another, “Looks like we sold this beach house right before hurricane season!”

John Honovich

IPVM | In reply to Undisclosed Manufacturer #1 | 10/11/17 05:36pm

That's funny!

For those who do not get the reference - Avigilon Acquires All ObjectVideo Patents for $80 Million USD.

And yes, for ObjectVideo to get $80 million after failing so hard and so long was quite a piece of business...

Undisclosed #2

IPVMU Certified | In reply to John Honovich | 10/11/17 05:55pm

And yes, for ObjectVideo to get $80 million after failing so hard and so long was quite a piece of business...

For me, the amazing thing was not just what they got for it, but who they got to buy it.

Whatever the real value of the portfolio was, it was worth far more in the hands of a asset-less, non-manufacturing troll.

In Avigilon's case though they are hand-cuffed in an aggressive use of the portfolio, lest their own products come under attack by the myriad of patents owned by the giants, like Sony and Samsung.

John Honovich

IPVM | In reply to Undisclosed #2 | 10/11/17 05:59pm

I think you actually called this a few years ago, feel free to cite yourself and take your bow ;)

Undisclosed #2

IPVMU Certified | In reply to John Honovich | 10/11/17 09:59pm

Sure, but you get credit for sharpening the headline to:

Why Are You Not Happy Avigilon Slayed The Troll?

Undisclosed #3

10/11/17 07:03pm

What's the upside for Avigilon? Canon could obviously shut down the OV patent portfolio but if Avigilon were to "win" what would Avigilon gain? $5 per analytics license Axis sells? How often does anyone actually buy any Axis analytics add-ons? The upside for Avigilon for a win seems small but the downside of an invalidated patent portfolio seems mammoth.

Undisclosed #4

10/11/17 11:17pm

Now, now boys... get out of the mud and innovate... never mind trying to gain incremental revenue from your patent portfolio... only your attorney's benefit. US patent law stifles innovation and needs an overhaul.

Igor Falomkin

AxxonSoft | In reply to Undisclosed #4 | 10/12/17 05:43am

The worst thing that Object Video has mostly patented obvious or wide known things. And now Avigilon abuses the US patents law, using the fact that it's much cheaper to sign a license agreement then to try to invalidate a patent in a court.

John Honovich

IPVM | In reply to Igor Falomkin | 10/12/17 11:22am

it's much cheaper to sign a license agreement then to try to invalidate a patent in a court.

I agree that is generally the case, especially since litigating is a significant up front cost with an unknown probability of winning.

However, this is likely not the case for Canon / Axis / Milestone, ergo this lawsuit. I still think it will be settled but not sure who blinks first.

Undisclosed Integrator #5

In reply to John Honovich | 10/14/17 09:25pm

If it's one patent versus another why not file an interference action with the USPTO and they will sort out who keeps the patent.Then the winner is in a much stronger position to win a patent fight. I did this quite successfully in 2004.

Undisclosed Integrator #6

10/17/17 01:10pm

My question is what IP patents does Axis/Canon hold that they can counter-sue Avigilon with, if need be? From everything I've ever read/heard Axis did invent the IP camera as we all know today. Do they hold patents on the technology itself?

Brian Karas

IPVM | In reply to Undisclosed Integrator #6 | 10/17/17 02:35pm

We listed out the patents that Canon is claiming infringement on in our initial coverage: Canon Sues Avigilon. Here the are for easy reference:

US Patent No. 6,580,451, titled “Communication Apparatus, Image Processing Apparatus, Communication Method, and Image Processing Method” - Filed 1996
US Patent No. 6,911,999, titled “Camera Control System” - Filed 1997
US Patent No. 7,034,864, titled “Image Display Apparatus, Image Display System, and Image Display Method” - Filed 2001
US Patent No. 7,321,453, titled “Image Input System” - Filed 2004
US Patent No. 9,191,630, titled “Dynamic Layouts” - Filed 2007

The idea of Axis "inventing" IP cameras was also raised in the Axis and Arecont Legal Conflict Over Multi-Imager Cameras report. While Axis holds several patents, there is no patent on an "IP camera", most likely due to it being too broad to patent, and prior art of transmitting images from a camera over a network.

Undisclosed Integrator #7

10/20/17 09:07am

Canon really has a HUGE portfolio of patents (67,970). I did a search on "Canon" and "Video", there are 1161 patents. For comparison Hikvision has only 25 patents.

Couldn't this be the opening salvo of a disruptive move to the entire camera industry. If canon has valid patents, together with the acquisition of Axis and Milestone. These moves are they part of Canon (sales 31B) with a master plan to first kill Avigilon (sales 0.5B) then go after all the camera and VMS system manufacturers after that?

John, there would be value to IPVM members to engage a lawyer knowledgeable about patent litigation and strategy and provide a brief on: (i) the merits of the 4 Canon patents and claims against Avigilon, (ii) What's the game plan? licensing or collecting on past profits, or shutting them down (iii) who are the potential companies (is ADI also exposed?) that would make sense to next go after and their relative exposure...

John Honovich

IPVM | In reply to Undisclosed Integrator #7 | 10/20/17 10:39am

These moves are they part of Canon (sales 31B) with a master plan to first kill Avigilon (sales 0.5B) then go after all the camera and VMS system manufacturers after that?

We believe this is just a response to Avigilon and that Canon will not target any other video surveillance manufacturer that does not first attempt to demand patent licensing from Canon. Our reasoning behind this is that Canon, Axis and Milestone have no track record of trying to make money by patent licensing from competitors and that Avigilon has a highly atypical track record of doing so.

Undisclosed #2

IPVMU Certified | In reply to John Honovich | 12/29/17 06:10pm

Our reasoning behind this is that Canon, Axis and Milestone have no track record of trying to make money by patent licensing from competitors...

Not to beat a dead horse, but also Canon could likely be counter-sued by any of the major players; Sony, Techwin, Panasonic for something, inhibiting their aggression as well.

John Honovich

IPVM | In reply to Undisclosed #2 | 12/29/17 06:14pm

Canon has not sued nor threatened any video surveillance company beyond Avigilon. Even in your theory about being afraid to sue major players was true, there are enough smaller players that they could go after if they wanted to. Since they have not, that disproves your claim. But go on, beat that dead horse.

Undisclosed #2

IPVMU Certified | In reply to John Honovich | 12/29/17 07:16pm

...there are enough smaller players that they could go after if they wanted to. Since they have not, that disproves your claim.

Smaller players have less meat on the bone in terms of both awards and market share, therefore they are less desirable to a company of Canons size.

Your reason for their abstention is circular, they won’t because they haven’t yet.

Undisclosed #8

In reply to Undisclosed #2 | 12/29/17 07:42pm

actually his reason is not circular - it's an open conditional statement.

circular reasoning is a logical fallacy in which the reasoner begins with what they are trying to end with.

Undisclosed #2

IPVMU Certified | In reply to Undisclosed #8 | 12/29/17 08:38pm

Ok. But it’s not much of a reason either. Surely Canon has not decided to avoid litigation because they don’t have a “track record”.

One would expect they would have actual reasons.

IMHO, it’s not crazy to think that one of the elements of their calculus would be a consideration of being counter sued if they attempted to sue someone big enough to otherwise be worth suing.

Undisclosed #8

In reply to Undisclosed #2 | 12/29/17 08:49pm

"One would expect they would have actual reasons."

I am positive that you are right here.

Reason #1: AVO paid $93.375M to buy various patents from OV, BRS, et al....

Reason #2: Which other VMS provider has a Patent Licensing Program?

Undisclosed #2

IPVMU Certified | In reply to Undisclosed #8 | 12/29/17 09:08pm

Agreed.

John Honovich

IPVM | In reply to Undisclosed #2 | 12/29/17 09:56pm

#2, keep digging.

The facts: Canon has only sued 1 video surveillance manufacturer - Avigilon. Avigilon has threatened nearly every video surveillance manufacturer. No other manufacturer has reported being threatened or approach by Canon.

Here are the contending theories:

IPVM: Canon is countering Avigilon's legal threats.
#2: Canon wants to get money from everyone but is too scared of major players and too indifferent to smaller ones that Avigilon is the only one they find attractive. Also, that Avigilon has almost certainly went after Canon for patent infringement first is a total coincidence and irrelevant to Canon's decision to sue Avigilon.

Occam's razor for IPVM but feel free to think what you want.

Undisclosed #2

IPVMU Certified | In reply to John Honovich | 12/29/17 11:49pm

Here are the contending theories.

False dilemma. They’re not in contention.

What statement do you disagree with exactly:

Canon is suing because of Avigilon’s legal threats.

Canon would not sue Avigilon if Avigilon was not making claims against Canon.

Canon would be wary of suing anyone who could make troublesome counter claims.

Canon would not sue minor players, as it not worth their time, nor worth testing their IP in the courts for.

Brian Karas

IPVM | 12/29/17 04:19pm

UPDATE:

Avigilon's motion to expedite and have the case moved to Massachusetts was denied by the MA court:

Undisclosed #8

12/29/17 05:57pm

If you read the entire claim that Canon is making against Avigilon, you would be hard-pressed to name any other VMS provider who couldn't also be sued by Canon under the exact same infringement claims.

I think it is clear that what John surmises above is true:

"We believe this is just a response to Avigilon and that Canon will not target any other video surveillance manufacturer that does not first attempt to demand patent licensing from Canon."