ObjectVideo takes patent suit to U.S. trade court

Back in April of this year, video analytics technology firm ObjectVideo announced that it had filed a lawsuit against Bosch, Samsung and Sony. This week, the company did it again.

ObjectVideo announced yesterday that it has filed an additional lawsuit with the United States International Trade Commission (ITC) alleging the same complaint as in the prior suit. The suit claims that the three firms infringed upon ObjectVideo's patented technologies.

Public relations representatives for both Bosch and Samsung said the companies could not offer comments on the suit.

ObjectVideo's CEO said that filing the lawsuit in both the Eastern District Court (where the first suit was filed [see previous news story]) and with the ITC was the plan all along.

"We thought a lot about venue," said ObjectVideo's CEO Raul Fernandez. "One of the reasons we picked the ITC is that it leveled the playing field between large companies and small companies, and it's designed to move extremely fast. You don't get any monetary damages at the end of this process. What you do get if your claims are proven, then the offending product gets banned from importation, and that usually brings the parties together for negotiations."

Asked how fast that process can take, Fernandez said that most ITC proceedings are conducted in well less than two years.

In turn, however, Fernandez said it is more costly to file suit with the ITC and that there is much more pre-complaint paperwork that has to be done. Fernandez said the company literally delivered a vanload of paperwork to the ITC earlier this week. Despite the cost and added work, the ITC had appeal to the firm, he said, because it's generally a more efficient path.

It fit well, of course, that ObjectVideo was suing three international firms. The ITC is designed for bringing cases by U.S. firms against international importers, and ITC's patent investigations fall under the purvey of Section 337 of the Tariff Act of 1930, which prohibits "unfair practices in import trades."

"We picked these three because all of these products are made abroad and brought into the U.S.," said Fernandez, who added that the company would rather have a business relationship than a contentious legal fight.

"Our point isn't to shut down business lines, but to be properly compensated," he said. "We want them to honor the same terms and conditions that others have honored. I would love to work with these three companies. I'd rather them sell our software in their devices. We're going to enforce our innovations, but we would love to have a business relationship beyond this intellectual property lawsuit."

ObjectVideo's business is divided into two separate P&Ls, said Fernandez. There is the primary P&L for the software sales of ObjectVideo's technology. The second P&L for the firm is the intellectual property enforcement side of the business.

Fernandez said the firm doesn't need the lawsuits to be profitable, but rather the point was "capturing the complete value of what we have invested in all those years." Fernandez said ObjectVideo had finished its 2010 year audits and was profitable, and for 2011 he said the firm saw a "great" first quarter.

"From a core business standpoint, we are doing very, very well, and we've continued traction with our existing partners, and we have some incremental partners that we will probably be announcing in Q3. We are on track to add new features and new versions of our product."

Since the Eastern District Court lawsuit was filed in April 2011, Fernandez noted that ObjectVideo had been approached by video management and analytics firm Mirasys to license the company's technology. The two firms now have an official licensing agreement.

"It was a happy surprise that we had multiple calls after the first lawsuit," Fernandez said. "Those calls led to one deal being announced and multiple deals are being worked on right now."

Using the ITC to attempt to ban importing of products isn't new in the technology world. Samsung itself used the ITC this week to file suit against Apple to attempt to block Apple from importing iPhones and iPads into the U.S., alleging that Apple infringed on Samsung's technology. At the same time, Apple is said to be one of Samsung's larger customers, buying Samsung memory chips for its devices.

The lawsuits typically are not enforced to block importation, although that is the legal threat. As Fernandez noted, and as evidenced in the resolution of previous ITC suits, these lawsuits typically lead to financial negotiations.