Panasonic Sells Security Camera Patents To Troll

By John Honovich, Published Jun 04, 2018, 12:22pm EDT

In a highly atypical move, Panasonic has sold off nearly 100 security camera patents to one of the most well-known patent trolls. This comes just months after reports Panasonic is selling off their Chinese security camera factory and following Panasonic staring to OEMing IP cameras from Dahua.

Inside this report, we examine this move, share feedback from Panasonic to IPVM, and argue why we see this as a lose/lose, bad news for Panasonic and their competitors. Plus, we review Panasonic's newest statement on the factory sale and why it is poorly done.

Sale ** *****

********* *** **** ** patents ** *****, ***** ***** ********* as ******** **:

******** ****** ************ ************ covering ***** ********, ***** recognition, ****** *******, ****** mechanical/housing ************; *** ******** camera ******* **** ** retail *** ***** ********** buildings ** **** ** in ***** **** ************

Partnering **** ****** *****

********* **** ** ********** with **** *** ****** money ** ***** ******* security ****** *********, ** WiLAN **********:

*** *********** *** **** under *****'* *********** ******* which ******** *** ******* of ******** ********* **** a ********* *******.

No **** ** ******* ******

**** *** ****** ** patents *** *********, *** the ******** ****** ******* or ******** ********.

Panasonic *********

********* ********* ** **** that:

********* *** *********** ** WiLAN ***** *** ******* which ***** ******** ****** technology. ** ************ *** evaluating ***** ******* ** a ******** **********. ** make ******** ************, *********** or **** ********* ** the ******* ** *** evaluation, ** **** **** is **** *** **** of **.

Patent ********* / ********

***** *****, ** *** name *******, *** ********** focused ** ******** **********, for *** **** ** years *** ******* *** been*******, ** ** ********* it, ** "********** *** monetizing ******** **********" ** as**** **** ****, * patent *****:

Commitment ** ********* **********

** ** ******** ** the ***** ** ************* for ** *******, ********* security ******** ** **** off *** *******. *** only *********** *** *** Labs *** ****** ***** who **** **** *** their ******* *** ***** companies **** ************* ****.

Compared ** ********

** **** ****, ***** is ****** ** *** role ** ********, ******** patent *********. *******, **** recently, **** ****** *** Motorola ****, ******** ************** in ********* ****** ********* has **********, **** **** we **** **** **** industry *******.

Risk ** ******* ******** - *** **

** ** ******* **** the ********* ** *** Panasonic's *********** ** *** up. ***** **** ** targeting ********* **** **** believe ******** *** *** best ********* *** ****** Panasonic's ***********. *** **** WiLAN **** ****** ** unclear ***, ** *******, it ** ****** ** be * ********. ** the ******** **** *** Panasonic ***********, ****** ********, WiLAN ** * *********** fully ******* ** ****** licensing.

Dumb ********* ************ ** *******

******** **** *** ****** sale, **** ****,******** ***** ********* ** article******** *** ********* ******* sales *******:

********* ** *********, ********* opened * *** *** sale ** *** ****, and ******* ********* ********* US ********** **** ******* Group *** **** ******* responded. *** ****** **** is ******** ** ** several **** ** ******* yen. [*** ******* ******* USD]

*********, ** ********,****** * ***** ************* "********* ******* ********** to ******** ********* ********" declaring ****:

*** [******** *****] ****** is *** ************* ** any ******** ********* **********.

**** ** *** **** of ********* *** **** when ****** *** ******* is **** ** **** think ******** **** ** dumb. *** **** ** either ********* ** ***. If ********* **** *** want ** ******* ** at ***, *** *******. But **** *** *********, so **** ********* *** capable ** ****** '**************' or ******* **.

Panasonic ******** ****** ************

********* *** ************** **** security ****** ******* ** a ***** *** ** virtually ********* ******* *** its **** ******** ****** factory. *** **** *********** point ** ***** ***** release ** *** ***** about ***** ****** *********** offering. *******, ** ********* thinks *** ******** ** difficult ******** ****** ***** is ** ***** ** be * ****** *********** provider, **** *** ** far ****** ******* **** they *******.

Bonus - ****** ** ****** ********

** *** ******** ****, for ***** ** *** who **** ** ****** from ********* ****** ********, you *** ****** ** investor ** *****'* ****** company,***********, * ******** ******* trading *** $*.** *** at **** ** **** publication.

Comments (22)

Selling your patents is basically declaring that you're out of the business and have no intention of getting back in, right? 

But but but....

I agree selling one's patents is a sign of retreat, if not exit. That or they are really hard up for money but it's Panasonic so the few tens of millions they may make with WiLAN is, for their scale, nothing.

But it worked out well for Kodak - said no one ever.

If I were an evil empire kind of person, I would think this is a brilliant way to let someone else take the heat for creating disruption with your competitors and OEM's.

Sell patents to Troll, keep rights to patent functions as a part of the agreement.

Troll creates drama for competition, not you.  Panasonic has plausible deniability.

How Devious Mini

Does any company survive Bain Capital?

Bain Capital is like Gordon Ramsey. Only about 40% of restaurants featured on Kitchen Nightmares survive in the long term, but 100% of those restaurants were circling the drain before he got there. Same deal with Bain Capital. 

Some companies have done well under Bain, but not all by a long shot. 

Panasonic will be partnering with them and making money as WiLAN targets security camera companies, as WiLAN emphasizes:

No, this is NOT how to do it.  You just sell the patents and walk away.  Then you have nothing to do with their enforcement down the line.  Less ill-will and no counter-suits from other camera manufacturers directed at your products.

Unless Panasonic really does intend to get out altogether...

Let’s see if the industry will come together to fight these or submit one by one behind NDA’s, like in the past

It sounds to me like Panasonic just issued the Brooklyn Greeting to their security industry 'partners'

 

Someone messaged me saying they bought 1,500 shares of Quarterhill (WiLAN). A few thoughts:

  • Lol
  • 1,5000 shares of a stock trading at $1.62 Canadian is not much more than a single Mobotix camera...
  • IPVM does not provide investment advice.
  • From scanning their Investor Relation's 2017 Year in Review, it's not a big company (~$135 million annual revenue) but it's big enough that the Panasonic deal, even if it's successful won't be a major factor for the company.
  • Also, this implies WiLAN did not pay Panasonic much up front, given the company's revenue is $135 million, if it was more than say $10 million, it likely would have been material for a company this size. Given that it was not disclosed, indicates the price paid was low. Of course, Panasonic may make their money going forward from the licensing sharing. 

Patents can tend to be a polarizing subject. Seems like some think patents are a dirty word, the playthings of trolls and a drag on our industry. There is another side too. They are the result of investment, innovation and forward thinking. Those willing to take the risk must have an upside to look forward to, a way to monetize their inventions IF there is in fact a market for them. 

People won't stay awake a night thinking, designing and building new things if there is not a way to protect that investment. Trade secrets is a legitimate approach, but patents bring the ideas into the light of day for all to see.

If Panasonic was not going to use their IP, then I'm glad to see them divest it. With any luck, we'll see WiLAN breath new life into the new ideas and perhaps some interesting innovations may find their way to our industry. 

I don't think anyone is saying patents are a dirty word.  What people are saying is patent tolling is an unnecessary and costly drag on legitimate companies that actually make things.

Firms like WiLAN are solely in the business of shaking people down for money whether the IP claims are valid or not and generally don't produce any product or for that matter any new ideas.  That's how tolls operate and what makes them trolls: give me money or I'll sue you and cost you even more money.  Are there issues with current IP law and the patent system, sure but I haven't seen one comment here suggesting the solution is getting rid of patents.  And make no mistake, WiLAN is not interested in innovation or using these patents for any constructive purpose, that's not how they make money.  Suing legitimate manufactures or threatening to sue is how they make their money.

I do see your points. Thanks. 

Skip, there were companies in the past that essentially bought patents solely for the purpose of threatening others into paying.  Frequently they went after the end-users which was a horrific situation to be in.  It is the closest thing to hostage taking I have ever heard of.  For our industry this is why patents seem to be a dirty word.  There are many related articles on IPVM about Hawk, ObjectVideo, etc.

 

 

How about a poll? Guess on the amount of time until a suit is filed against a Panasonic competitor? I vote 4 months.

Jason, thanks. You're right. I should have had some poll included but it's late now to add.

One point about lawsuits, it may not come to lawsuits (at least not right away) since typically companies try to negotiate privately, avoiding a suit if possible.

On the other hand, WiLAN has a track record of litigation:

At the very least I will now think twice before selling anything with a Panasonic label on it to one of my clients (Business Phone Systems, Cameras, etc.)

Would be surprised if a component of the agreement between Panasonic and WiLAN was not a fully paid license through the life of these patents allowing Panasonic to practice the art contained therein.  Panasonic should certainly be able to confirm whether or not this is the case.

#9, there is no doubt Panasonic retains a license, as WiLAN's own's press release describes this as a partnership between the two:

The acquisition was made under WiLAN's partnership program which features the sharing of revenues generated from a licensing program.

What does this mean for end users? I recently purchased a VideoInsight system and intend to purchase a dozen or more Panasonic cameras, as there is no license fee if used with VideoInsight. I noticed they did not indicate which patents were sold, so there may or may not be an impact to me, specifically, but in the broader scope, what can we expect?

The good news for Panasonic users is that they are still covered and won't have any impact or hit from the patent licensing / enforcement / litigation.

The bad news for Panasonic is that selling our your patents and your main factory are bearish signs about Panasonic's commitment to the video surveillance industry.

It is articles like this that make me wish all of these large manufacturers were publicly traded and not buried in a larger company.  I enjoy John's evaluation of the financials.  IPVM has been prescient of impending implosion/acquisition even if predicted years out.  It is starting to look as though there is smoke but no fire so far.

If they ever do exit the market I will be greatly disappointed.  Of the former three "never VMS until it is too late" greats - Pelco, Bosch, and Sony I would have expected Panasonic to be the last to fail.  Panasonic at least adopted IP surveillance fairly quickly.

Panasonic at least adopted IP surveillance fairly quickly.

Good point about that. Panasonic was earlier to IP and one of the biggest players 10 years ago. So unlike Pelco, it was not as if they had to struggle to catch up. They just, for whatever reason, gave up in the past 5 years or so.

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