ObjectVideo / Mirasys Patent Agreement Examined

Author: John Honovich, Published on May 15, 2011

European manufacturer Mirasys is the first surveillance company to publicly disclose a patent agreement with ObjectVideo since ObjectVideo filed suit against 3 global surveillance manufacturers. In this note, we examine the significance of this agreement and the potential benefits for ObjectVideo.

The first interesting element of the deal is Mirasys's overall positioning. Mirasys does not develop video analytics. They are a VMS software / NVR appliance provider most similar in size and product offerings to Exacq. Mirasys does offer an analytics integration framework (called Carbon) that facilitates the use of 3rd party analytic offerings (most similar to Milestone's analytic integration). Mirasys's revenue and deployments are overwhelmingly VMS only, not video analytics.

We project that the real benefit to ObjectVideo is for positioning rather than revenue generation. Mirasys is not a large company and they likely sell systems using a minimal amount of video analytics (a few thousand channels per year at best). Presuming that ObjectVideo is charging a few dollars per channel to license the patent (the most we would reasonably expect they could obtain), the net revenue of this deal is trivial. It probably costs more to negotiate and publicize the deal than it will generate in revenue for the foreseeable future.

The benefit of ObjectVideo is to use this deal to motivate other (bigger) manufacturers to agree to license their patents. The motivation is intimidation. As ObjectVideo's CEO boldly stated in the announcement, "This takes any uncertainty from Mirasys’s end customers. They are reassured that they’ll be using VCA that is fully covered and patented, giving them a competitive advantage." It is a powerful though controversial sales tactic - pay up and your customers no longer need to fear us.

As we mentioned in an earlier review, we confirmed that Axis also has a license for OV's patents. However, from numerous ObjectVideo public comments, it appears that the agreement does not allow them to publicly cite this (they regularly refer to an agreement with an undisclosed global publicly traded surveillance manufacturer).

If ObjectVideo can demonstrate momentum in manufacturers agreeing to deals, they increase the likelihood of other manufacturers to follow. While Mirasys is the first announcement, since they lack name recognition, we will have to look for what manufacturers ObjectVideo can secure patent agreements with next. 

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