Manufacturers Sound Off on Avigilon / OV Deal

By John Honovich, Published Dec 22, 2014, 12:00am EST

$80 million cash for no products, just patents - one of the most unusual deals in the history of the video surveillance industry.

IPVM did a survey of more than 50 manufacturers - Avigilon's competitors - to see what their outlook on the deal was.

The two open ended questions were:

  • "What impact, if any, do you believe Avigilon's acquiring OV patents will have on your company?"
  • "What impact, if any, do you believe Avigilon's acquiring OV patents will have on the industry overall?"

Short term, manufacturers generally had little concerns but long term the fears were huge.

Inside this note, we break down the commentary and share the full results.

Most - No Direct or Immediate Impact

Over 60% of respondents said that the deal would have no direct or immediate impact on them, primarily because they do not sell or offer video analytics. This reflects the historically weak state of video analytics in surveillance.

Representative responses included:

  • "I don't see any immediate impact on our company, we don't have any video analytics (other than motion detection) in our VMS or cameras."
  • "We don't manufacture any analytics so I don't see an impact to us."
  • "None, we do not have any internally developed analytic. We partner with analytic companies to bring these kind of offerings."
  • "I would expect little impact to our company. Analytics is a very small part of our business."

Some Short Term Concerns

A minority expressed significant direct concerns either because of Avigilon as a general competitor or because of their impact on analytics:

  • "Knowing Avigilon will likely be looking for any opportunity to claim infringement for just about any intelligent automated video analysis software will require more diligence in making absolutely certain that all our original technology is clearly understood to be one hundred percent our invention."
  • "Avigilon is a big stone in our shoes in many projects. Avigilon strengthening their Analytics portfolio will make things a little bit more interesting from now on for bidding projects."
  • "Many camera vendors are developing metadata generation code, but some vendors are not sure if they can allow this code to work on their cameras because of OV's patents. The only hope, that Avigilon will not consider this part of business as important and not try to make money suing other companies."
  • "Probably postpone any plan, if any, to implement some form of Video Analytics in the short to middle timeframe."

Shut Down - Industry Concerns

The most common theme from manufacturers was that Avigilon was going to use the patents not to generate royalties but to block their rivals from competing in the analytics space:

  • "Avigilon might very well keep a stranglehold on the technology and keep it for themselves, to gain a competitive advantage."
  • "Should they decide to be overly aggressive it can have the effect of shutting down completely the evolution of video analytics."
  • "If they go after end users (like Hawk technologies did) it will stop some deals in their tracks."
  • "I would assume that with the enormous amount they spent, there will be an aggressive enforcement policy coming in the near future."
  • "A company already known for being overly aggressive in its market approach will likely now feel more empowered to take that to belligerent and bullying levels."
  • "It may drive some analytics companies out of business and it will drive more business to Avigilon VideoIQ analytics."
  • "I don't think that Avigilon is interesting in patents licensing business. If they try to stop others using this patents then it will be a disaster for the industry."
  • "If the goal of Avigilon is to "racket" all other companies working on video analysis, it will nipped in the bud all future innovations in this area. It could be a disaster for the entire industry."
  • "OV had a clear interest in entering into licensing agreement, where Avigilon's interests are more towards killing the competition (so it seems)"
  • "In the long run, they will use their advantages of these patents to crush other companies."
  • "I think it will have an adverse effect on the business because we have already seen the ways that Avigilon is unethical and now they have even more power to abuse by getting these patents."
  • "I believe that Avigilon will become the next industry┬┤s Patent Troll... This can only be very very very bad for the market"

The one major counter to this, noted by a few respondents, is that many manufacturers already have agreements with OV. To the extent those agreements are not voided or worked around by Avigilon, those manufacturers should be relatively safe, even if Avigilon aims to be aggressive.

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