Surveillance End Users Getting Sued by Hawk

Last year, Avigilon sued Hawk Technology Systems while Hawk sued Vicon and BJ Wholesale Club plus countersued Avigilon for patent infringement. Now Hawk says it will shift its strategy from targeting manufacturers to targeting end users. We interviewed Barry Schwab [link no longer available], the Chief Technology Officer and President of Hawk to understand their patents, approach and intentions.

Our report answers these questions:

• Why is Hawk targeting end users?
• What does Hawk's patents cover?
• What happened to the initial suits against Avigilon, Vicon and BJ's?
• What type of licensing agreements is Hawk looking for?
• How and when did Hawk invent this?
• Who may be violating Hawk's patents?
• What will happen to manufacturers and end users?

Schwab believes targeting end users benefits everyone involved and avoids long drawn out lawsuits. “Someone could say ‘I want $10 million from a major manufacturer and $5 million from another manufacturer, but we are content with earning smaller amounts with friendly, small settlements rather than drawn out battles. Plus, against those types of companies, it would be five or six years before we got a resolution,” he said.

He says the benefit to end users is that once they buy a license, it is good for any equipment they use. So if they upgrade to a new system by a new manufacturer, they are still covered. Additionally, Schwab says they are also willing to work out a one time licensing fee with integrators that would cover any of their customers.

“We previously started by going through manufacturers but by education we have learned that is not the easiest or the fairest way to go,” he said. Schwab says it is hard to blame manufacturers because they don’t always know how the equipment is going to be used.

If video systems that are used solely for monitoring, they do not violate the Hawk Technology Systems patent, he says. But any systems that record could possibly infringe on Hawk Technology patents.

The Patent and Multistreaming

Hawk Technologies has essentially patented multi-streaming video surveillance (the patent in question is RE43,462, a re-issue of patent 5,625,410, filed in April 1995.)

Here's how they describe it:

“This invention relates generally to video monitoring, and, more particularly, to such systems employing means for digitizing camera images for display at a first image size, sampling rate, and frame rate, and for digital storage at a second image size, sampling rate, and frame rate.” [emphasis added]

That is the definition of multi-streaming. They further describe adjusting stream parameters based on window size:

"Display the digitally compressed images from the cameras in different windows on the display screen, each window being associated with an update rate and dimensions in pixels, vary the dimensions and the spatial parameters and temporal parameters at which a particular image is updated in its window." [emphasis added]

This is another fundamental aspect of multi-streaming done to minimize bandwidth consumed and processing power for displaying live video. Lastly, they describe its use in recording:

"Displaying at least certain of the digitized images in separate windows on a display device, using a first, predetermined frame rate and resolution associated with each window; and simultaneously storing the displayed images using a second, predetermined frame rate and resolution associated with each image" [emphasis added]

This too is a fundamental aspect of multi-streaming, allowing storage to be independent of what is displayed live.

Initial Suits

vs. Avigilon

Immediately after having its older patents reassigned, Hawk Technology Systems sent a letter to two Avigilon customers asking them to review their systems to make sure they did not violate any of its patents. Avigilon says Hawk found the customers because both are featured in case studies on the Avigilon website.

Avigilon says based on this information it expected that Hawk would try to sue them next. So they filed a suit against the company asking for a declaratory judgment that Avigilon had the rights to use the patent.

Hawk Technology Systems responded by launching a counterclaim, suing Avigilon directly for infringement and saying Avigilon also induced its customers to infringe on the patents by providing them infringing products. After a protective order that would allow both parties to review each other’s source code, they both agreed to a joint dismissal. The companies never exchanged source code information. 

vs. Vicon

In February, Hawk Technology Systems sued Vicon saying it infringed on its patents. See Vicon’s full response here. Both parties agreed to dismiss the case.

vs. BJ’s Wholesale

On June 27, it filed a complaint against BJ’s Wholesale saying “Without Hawk’s authorization, BJ uses a video storage and display system and/or methods that infringe one or more of the claims in the ‘462 Patent.” BJ’s has not yet responded to the complaint.

Interestingly, none of the parties have ever requested a reexamination of this patent. 

Because of an extensive list of prior art references that were reviewed as part of the reissue process Schwab says they are not overly concerned about a reexamination.

Licensing Agreements

Hawk Technologies has licensing agreements with “less than 20 companies ... and some of them involve bigger companies,” Schwab said. He would not disclose how many were end users, manufacturers or integrators. Nor would he disclose how much companies had paid to license the software, but said, “if you look at the model used for video management software, it is often a license fee of $100 per year, per unit. That would be a lot for many schools and such who have a limited budget. Our program is much more modest than that.”

The industry should expect the number of suits to increase, especially end users as the company begins to ramp up its enforcement program this summer.

Background

In the late 90s, Schwab says he teamed up with partner Ken Washino. “We saw the way the industry was going. Some of our predictions weren't exactly right, but one of the things we were interested in was finding more economical ways to record video. At that time, we filed a number of patents based on testing we did. This is one of the areas in terms of video monitoring that we were pretty much on target." Schwab, who is a named inventor on more than 30 patents, says the company now holds patents providing coverage in the U.S., Canada and Europe. 

When they researched industry applications for their patents, Schwab says they found that larger companies were just beginning to produce similar products.

“You may have thought of it first, or you may have described it first, but its hard to compete with those companies because you don’t have the resources to bring products to market very quickly. The alternative, saying I’ll just let everyone have it for free is not really palatable when you’re the one who’s up at four or five in the morning every night doing drawings.”

Washino and Schwab retained a law firm that advised them the best way to protect their patents would be to add to them and get them re-issued. It took until 2012 for the patents to be re-issued. “By then, many companies were using the technology we described in the original patent back in 1998,” he said.

Schwab and Washino divided their efforts to try and catch up. Washino focused on research into video technology and while Schwab worked on finding a way to commercialize their video monitoring patents. Hawk Technology Systems was formed in 2012 to commercialize their inventions and patent enforcement.

Not A Troll

Hawk emphasized that:

“We are very careful to avoid being branded as a troll. We made sure we did research first and that we had evidence and that we were very very comfortable with it before we contacted anyone to get them to do a license agreement.”

Schwab says there are probably thousands of organizations they could target with patent suits, but “we’re not looking to go after every person,” he said. “We’re not looking to break anyone or put anyone out of business."

Entitled to Compensation

“You get a monopoly for a certain period of time in exchange for teaching people how to do something efficiently or in a new way. Then other inventors can make improvements. [The fee] is simply to say we thought of this first so we’re entitled to some compensation.”

The Potential Impact on Users and Manufacturers

Not everyone uses multi-streaming, even if it is available on the recorder/VMS purchased. This is likely one of the reasons that Hawk is going after end users.

Outside of simply settling, targeted end users have a few options:

• If they do not use multi-streaming, just respond accordingly.
• If they do use it, they may decide to simply turn it off though this could result in problems displaying video or increased costs in storing video.
• Go after the manufacturer. Put pressure on the manufacturer to make them either sue Hawk or get a blanket settlement covering all users of that manufacturer.

One other technical option that might be considered is using transcoding rather than multi-streaming, which accomplishes a similar goal by a different means. However, not many recorder manufacturers support transcoding and those that do typically do so for live viewing, not recording.

On the manufacturer side, the pressure will be on the VMS / recorder providers, rather than the camera companies. While most IP cameras support multiple streams, Hawk's patents are clearly describing operations that occur on the viewing client / management side.

If Hawk starts suing a number of end users, VMS / recorder providers will almost certainly have to intervene as the bad publicity and fear that this engenders would be a significant problem for them.

1995 - Dating Importance

That the patent is from 1995 is quite important. This is quite early even for digital video surveillance. For instance, the first network camera did not ship until the next year (1996). Companies often look to invalidate patents based on prior art but finding such from the early 1990s will be quite difficult.