When Will the ObjectVideo Lawsuits End?

By John Honovich, Published Dec 07, 2011, 07:00pm EST

Now almost 8 months since Object Video first launched their video analytics litigation campaign, is there is any end in site? In this note, we dig through court filings and investigation documents to examine the current status of the disupte, the potential timeline for conclusion and the industry implications of this battle.

This is the timetable projected/scheduled by the judge:

  • Discovery will run through end of March 2012
  • Trial will begin in July 2012
  • Initial determination by end of August 2012
  • Investigation complete by end of December 2012

A few of the more notable recent developments include:

  • The investigation has been expanded to numerous Bosch subsidiares including Extreme CCTV.
  • An ongoing debate over the process and terms of ObjectVideo reviewing the source code of Bosch, Samsung and Sony's video analytics. Essentially, the defendants are seeking to make access very limited and costly for Object Video.
  • Bosch has withdrawn its motion for having Axis testify in the case.

Most importantly, we have not seen any sign that the defendants are looking to settle. Periodically, there are settlement conferences but none has been reached.

Given this timetable, we will likely not have any indication of the outcome until the end of Summer 2012 - still quite some time away.

Analysis

Basically, this will leave the analytics industry in limbo for most of, if not the entirety of, 2012.

One important factor we do not know about is the cash position of ObjectVideo. The longer this drags out and the more complex the litigation becomes, the riskier it becomes for ObjectVideo. While ObjectVideo received a massive investment in the beginning of 2010, it is unclear how much cash they have left. Significant speculation exists that a large portion of the investment went to pay off existing debts and/or cash out existing investors. That plus the expense of the litigation raises questions about how much liquidity they will have if the case drags on through 2012.

On the other hand, we have not heard much practical impact of the lawsuit on the analytics market. There does not seem to be a significant chilling effect, however this may equally be a product of generally low interest in video analytics.

However, if the US ITC finds in favor of Object Video, it seems very likely that will have a significant practical impact. The big issue will be less about the impact on Bosch, Samsung and Sony but the fear/concern that the ruling could be applied to niche specialists who are more commonly used in the market. The next major scheduled milestone is the Summer 2012 Initial Determination which will give a fairly clear outlook on the US ITC's position on the claim.

[Update: All the initial lawsuits (Bosch, Sony, Samsung and Pelco) have now been concluded.]

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