Object Video sues Sony, Samsung, Bosch

Patent assertion program led to suit
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Thursday, April 14, 2011

RESTON, Va.—The news, announced last week, that video analytics maker ObjectVideo is suing Sony, Samsung and Bosch for alleged patent infringement on some of OV’s analytics took the industry by surprise, and had many asking the question: “Why now?”

After all, certain technologies have been in use for a while now, so why suddenly start suing major camera manufacturers?

Is the lawsuit, as some surmise, designed to generate publicity or an opportunistic move by attorneys trolling for a patent lawsuit?

Defendants Sony, Samsung and Bosch all declined to comment at this time because litigation is ongoing.

Raul Fernandez, CEO of ObjectVideo, said the lawsuit is a byproduct of a “patent assertion program” that ObjectVideo decided to undertake about 18 months ago.

Fernandez told Security Systems News that while the company has always sold licenses to its software, it did not license OV’s intellectual property (IP) until about 18 months ago when OV was approached by a “major foreign camera manufacturer, a legitimate player in our space,” whom Fernandez declined to identify by name. That company wanted to license some of OV’s IP to make its own analytics. Those discussions led to OV’s first IP licensing agreement, he said.

“That really crystallized the value of our innovations and patents,” Fernandez said.

Subsequently, Fernandez said he and other executives started thinking more about the value of ObjectVideo’s intellectual property and the fact that it should be licensing the rights to use this IP.

“We looked at different ways to assert our patent rights ... and we came to the conclusion that we needed to be better resourced to begin an assertion program of any kind,” he said.

The process of looking for a new capital partner took a while and led eventually to a $27.75 million recapitalization by York Capital in a deal that closed in late 2010.

York Capital is a $15 billion capital management firm with offices in New York, London and Hong Kong. Fernandez said the firm has both investment and legal expertise, with particularly deep experience with patent monetization.

Asked if OV had lengthy discussions with Sony, Samsung and Bosch before filing the lawsuit April 6 in the U.S. District Court of Virginia, Fernandez said there had been previous discussions. “But clearly any business discussions with the three defendants in the past did not lead to any sort of relationship,” Fernandez said.

Fernandez said the licensing of OV’s intellectual property will provide a perfectly legitimate revenue stream for the company. Many major companies with deep patent portfolios (OV holds 37 U.S. and international patents and has 46 patents pending) derive significant revenue from licensing their IP, he said.

He named Interdigital, Alcaltel-Lucent and Kodak as examples.

Eric Griffen, former general counsel for Protection One who is currently an attorney in private practice, said that as technology in the security industry advances, “players may find that the intellectual property they own is extremely valuable. It only makes sense to seek to monetize that value. Licensing of patents/intellectual property is the way to do that.”

He pointed out, however, that “bringing suit to enforce a patent is expensive and a finding of infringement is not always a clear-cut proposition.”

The lawsuit seeks unspecified damages for infringement on patents, an injunction that will prevent the defendants from using the IP, and attorneys’ fees and other unspecified costs.

Fernandez said the lawsuit is now in the hands of external and internal attorneys. He said since the lawsuit was announced on Thursday at ISC West, he’s been approached by other manufacturers who think they may be infringing on OV’s IP.

While the lawsuit is ongoing, Fernandez said OV “will continue to innovate; we’ve launched our ARM platform into the market ... My first goal in life is to sell software to everyone, my second goal is [to ensure that no one] takes advantage of our R&D dollars and innovations. We will protect that.”

Editor's Note: In the original version of this story, Panasonic was erroneously named as a defendent in this lawsuit. ObjectVideo is not suing Panasonic. Security Systems News regrets the error.