Axis, Sony, Cisco, 11 More Sued

By Carlton Purvis, Published Mar 13, 2013, 12:00am EDT

Patent lawsuits continue to gain momentum throughout the world and in the surveillance industry. Though most of its suits were dismissed last fall, Puerto Rico-based Canatelo [link no longer available], LCC is back in court again suing more than a dozen surveillance manufacturers for patent infringement. Here's a look at who Canatelo really is, what their new suits are about and an update on the ones still in court. 

New Suits 

In early February, Canatelo filed complaints against 14 companies, including Axis Communications, Toshiba, Canon, Cisco Systems, TrendNet and Sony claiming the companies ripped off its motion detection capabilities. For example, see the complaint against Axis. All complaints make similar claims. 

Canatelo’s complaints say the companies violate a patent on “detecting motion in a video signal; compressing a portion of the video signal that includes the detected motion; and transmitting the compressed portion of the video signal that includes the detected motion as part of an e-mail.”

The Patents

The first patent in question, filed in August 1999 by inventors Luis G. Ramirez Diaz, Pedro Cruz-Burgos and Dan Rodriguez, was for a computer-based video security system designed to capture motion detection and send alerts via email, beeper or phone. It included a feature that would allow users to monitor camera remotely. The patent was issued in November 2002 (U.S. Patent number 6,476,858).

In October 2002 the inventors filed a second patent for computer technology that could read electronic video signals for indications of motion and transmit those alerts through a network connection. That patent was approved in December 2007 (U.S. Patent number 7,310,111)

Essentially, if a surveillance product detects motion and then compresses video, it violates Canatelo's patent, we noted in a post last June

Who Is Canatelo

Canatelo, LLC, formerly called I Care Medical Direct, LLC, is a “biomedical products distributor” based just outside of San Juan, according to documents filed with the Puerto Rico State Department. Here's an excerpt:

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The address we found in state documents is a unit in a hi-rise condo on the beach -- Condominio Plaza Del Condado -- however, a receptionist at Del Condado said that unit didn't exist. 

"We have a 1401, 1402, 1403 on the fourteenth floor, but no unit 14," she said. 

Repeated messages left for the company through its lawyers have not been returned. 

Despite there being little information about the company available online, (the domain name Canatelo.com was created two months prior to the first litigation with registration details hidden) Canatelo has been very active in the courts.  

Update on Old Suits 

In June, Canatelo sued Avigilon, Hikvision, Vivotek, UTC/Interlogix, and Nuvico saying the companies infringed on a patent on motion detection capability. It sued Office Max for carrying the “infringing” cameras.

All but two of the cases were dismissed "with prejudice" by the fall. This type of dismissal usually means a plaintiff failed to support its claims with evidence and that a plaintiff can't re-file the case. In at least one of the cases, an undisclosed settlement was involved in the dismissal. 

 “Our client settled the case. The lawsuit was dismissed as a result of the settlement agreement,” was the word from Vivotek counsel, who would not disclose the details of the agreement.  

Open Cases - Avigilon, Nuvico

The cases that remain open are Canatelo’s case against Avigilon (which it amended last month at the same time it filed complaint against the 14 other companies) and its case against Nuvico (which has been held up by motions to file/translate parts of the case in Spanish). 

Avigilon declined to comment on pending litigation, but in a motion to dismiss the case last September, Avigilon said it did not know about the patents until Canatelo filed a complaint so it "could not have possessed an intent to cause someone else to infringe the patents." 

IPVM Analysis

We suspect Canatelo will have a hard time winning. Their broad, generally applicable, patent was filed in October 2002, fairly late compared to the development of early IP cameras. Moreover, unless Canatelo has far deeper pockets then we can find so far, unlike ObjectVideo, they may not be able to fund the multi-million dollar legal campaign necessary in such a contest.

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