A patent lawsuit filed against Avigilon (TSX:AVO) Tuesday is likely not material, says Cantor Fitzgerald Canada analyst Justin Kew.
On September 9th, an infringement suit filed by John B. Adrain in the Eastern Division of Texas (Marshall Division) claimed that the video analytics features Avigilon acquired through VideoIQ infringe on the plaintiff’s patent “Facility Monitoring System with Image Memory and Correlation”, U.S. Patent Number 5,831,669.
Kew says that as Avigilon builds its patent portfolio, infringement suits such as this will be become more common. He notes that this particular patent has been involved in a dozen suits dating back to 2008 involving defendants such as Genetec, Microsoft and Sony. Seven of these suits, he points out, have ended in settlements and he expects this one will go the same route.
Kew also points out that the impact of this suit is minimized because it is focused on analytics and not on Avigilon’s core imaging technology.
In a research update to clients this morning, Kew maintained his “Buy” rating and $34.00 one-year target on Avigilon, implying a return of 76% at the time of publication.