The first half of 2017 has been a successful one for Swiss security company Kudelski Group, winning multiple pay checks from operators and vendors alike by getting them to license its OTT video distribution patent portfolio. The latest to fall victim is Arris, on the back of a huge win for Kudelski earlier this month at AT&T.
Getting signatures from the world’s biggest set top manufacturer and the largest pay TV provider in the US in the space of a month shows just how successful Kudelski’s litigious strategy has been recently, particularly in toppling US firms. At this run rate, Kudelski could be nearing $100 million from patent license payments for 2016 and 2017 combined.
Delivering a one line press release in typical Kudelski fashion, the group announced that it has signed a limited patent license agreement with Arris this week, with no financial terms of the agreement being disclosed. Faultline Online Reporter’s requests for comment were once again denied from both ends.
Most license agreements from Kudelski relate to the relatively simple delivery of data to the TV screen, but also include using presentation syntax to offer interactivity, the creation of user profiles and systems of TV playout.
Another speculation is that the patents may relate to Kudelski subsidiary Open TV, a US business it acquired and has been suing companies on behalf of. Open TV holds around 800 patents from the Kudelski Group’s total of more than 5,300, and OpenTV also has a strong middleware platform on set tops in Europe.
While Arris is now legally headquartered in the UK after its UK Pace acquisition, it grew up in Georgia, meaning the set top firm joins the list of US companies that have essentially been forced to sign patent licenses from Kudelski over the past two years – in an aggressive but highly successful strategy. Other major US firms licensing patents from Kudelski and its subsidiaries include Apple, Verizon, NFL Enterprises, AOL, Cisco, Netflix, Google, Hulu, Yahoo and Disney.
Swiss financial services firm UBS estimates that Kudelski has received somewhere in the region of $62 million to $83 million from its various patent payments between 2014 and 2016. Kudelski’s most recent financials show full year revenue for last year of $1.1 billion, up 12.3% year on year.
Over the past 20 years, companies such as OpenTV within The Kudelski Group have been pioneers in developing many of the technologies that consumer electronics companies, such as Apple, are integrating into its products for delivering video content. This includes numerous patents directed to technologies for video and content management, distribution, information acquisition, sharing, authentication, secure storage, and control.
Arris is also in the midst of another patent spat with Sony, but the patents here are probably unrelated to this week’s license agreement. It recently returned fire at Sony, submitting allegations to the ITC that Sony is in violation of at least six patents that relate to technologies covering digital broadcast signals, graphical user interfaces, and how air flows through an electronics chassis. Arris is currently under investigation by the ITC for allegedly infringing Sony patents on set top and gateway components for cable and satellite reception.