Virtual reality cam pioneer Terpon recently entered into a significant patent licensing agreement with holder Virtual Immersion Technologies (VIT).
The U.S. patent, No. 6,409,599, applies to any “Interactive virtual reality performance theater entertainment system.”
The patent covers a sweeping set of important criteria for presenting live entertainment online, and until the Terpon deal, had been a challenge to circumvent or license.
To gain a better understanding of the ramifications of this legal maneuver, XBIZ turned to Terpon’s CEO, Jean-Claude Artonne.
XBIZ: Can you provide us with some background info about this ’599 patent deal?
Artonne: Deals like this take time to put in place. Terpon first began advocating for the adult industry to take a leadership role in the advancement of virtual reality three years ago. Since that time, we have overcome many obstacles on the path to making VR a business reality for adult site owners and content creators. When we discovered that this patent was going to impede VR’s progress, we reached out to the patent holders and orchestrated a deal we believe benefits everyone.
XBIZ: How big of an obstacle is the ’599 patent for the industry?
Artonne: For some, it is a huge problem already. As was the case with teledildonic technologies, some companies tried to go to market without caring about the IP landscape and were stopped by VIT via lawsuits, until they each negotiated individual licenses.
It’s also important to note that Terpon itself was never in danger of infringing upon this patent because it only applies to content producers or distributors and we do not create any content.
We understood, however, that VIT was in a position to go after many of our future clients, so we decided to proactively open discussions with them to try and find a smarter solution that can be profitable for VIT, for Terpon and for all of the cam companies that want to get into VR.
XBIZ: So now that Terpon has this license, what is the impact on other industry stakeholders?
Artonne: Our goal now is the same as it always was: We want to get VR cameras into the hands of content creators, to get VR content onto many cam platforms and to satisfy the desire of millions of VR fans seeking live shows online. We view this deal as a way to enable that future.
The patent covers any company or individual who performs a live or pre-recorded show with any interaction between the performer and the viewer that goes beyond watching the stream. Keep in mind, that reaches far beyond VR to include all forms of chat, tips, cam-2-cam or talking.
This deal gives Terpon an exclusive license for adult applications, while VIT maintains its right to independently sue any company or individual who infringes on the ’599 patent.
That leaves Terpon with a choice of two possibilities: The first option would be for us to ask for a sub-license royalty from anyone who wants to perform in the field covered by this patent. It’s an option we immediately decided against — since rather than seeking to earn money from clients, our goal has always been to earn money through our clients from end-users as part of a truly symbiotic relationship.
For that reason, we are going with the better option: We will cover any company or individual who wants to make use of our license, without any additional cost, as long as they are at least compatible with our cameras. Whether companies decide to go with Terpon or with an in-house solution, as long as they are compatible with our cameras they are covered. Also, any model who performs using a different camera will not have to worry about lawsuits from VIT as long as they are broadcasting on a site which is covered by our license.
XBIZ: Terpon spent considerable capital on this license. So, if you don’t plan to use it to stop potential competitors, or to get royalties on sublicensing, what is your strategy for profiting?
Artonne: Terpon cannot succeed unless many VR models and cam sites succeed first. This investment has been made because we want to protect the industry on a global scale in order to accelerate VR adoption. VIT has already enforced its patent against cam companies and threatened to enforce it against others. Rather than waiting to see how it would all play out, Terpon stepped forward to try to help the entire cam industry move forward with the kind of legal confidence necessary to foster real investment into this amazing new technology.
XBIZ: Does Terpon intend to launch its open VR cam platform based upon this new license?
Artonne: No. We are offering our clients the freedom to operate and are removing a difficult barrier for sites that we hope will make it easier for us all to grow VR this year. I think it is very important for the industry to understand that we always seek to only address the tech part of the equation and that Terpon has no interest in creating content, so we will never compete with our clients and model partners or any of the cam sites. Getting this patent protection for the industry is a demonstration of our good faith.
XBIZ: How will Terpon maintain a competitive advantage in the VR cam space?
Artonne: I personally do not believe durable success can be achieved via pressure and constraint. Forcing cam sites to go exclusively with our cameras would be the end of our relationships and we are confident that if a cam site is compatible with our cameras, they will quickly see our technology is far beyond anything any competitor has brought to market. All we are seeking is a chance to show what we can do on an equal footing with any alternatives — because given fair competition, our technology will win.
If a site decides that being compatible is not in its interest, we wish them well, but their operations will be outside of the protection of the license we obtained and we will not be in any position to protect them against action brought by the patent holder. It is the same for models who decide to broadcast in VR with another camera, or on non-compatible sites, which may be infringing on VIT’s patent rights.
XBIZ: You mentioned other obstacles Terpon has faced. What were some of the biggest ones?
Artonne: First and foremost, trying to distribute Terpon cameras without having cam sites ready to display VR content was an impossibility. We have had cameras ready to go since Q2 2017, as we originally planned, but getting existing cam platforms to add VR proved to be a huge challenge for three simple reasons:
First, there is the chicken-and-egg problem of platforms not wanting to offer VR until there are enough VR cams to broadcast, and VR cam performers not wanting to broadcast in VR until there are enough platforms to display their content.
Second, large cam sites saw little urgency to add VR quickly because they were already making good money without VR and rightfully wanted to maintain the status quo for as long as they could.
Lastly, three years ago, VR was a much newer technology than it is now. When we started, most people had never even tried a VR headset or if they had, it was a cheap piece of cardboard. So, it took time for the market to become educated, and now it is fair to say that most adult consumers have tried VR at least once and have experienced it for themselves. That makes discussing its inclusion on major platforms a lot easier.
XBIZ: Do you believe that cam platform owners are ready to implement VR?
Artonne: Some existing platforms have experimented with VR, but I believe it will be a new wave of cam sites that use this innovation to capture their own audience first, as is happening now on sites such as XVR.chat. Then, in time, when a proven audience exists, the major platforms will play catch-up and seek to integrate VR quickly. It takes time to get VR functional on a complicated cam platform, so my advice would be to pursue integration now with Terpon cameras and then each site can turn that functionality on with the simple flip of a switch when they are ready.
XBIZ: What does the future hold for Terpon and adult VR?
Artonne: We will continue serving all models and all sites in adult as best we can by developing services and products specifically designed to meet the needs of the adult industry at an affordable price.
This fall, we expect to have a new version of our Hermes camera ready to blow your mind in terms of quality while still keeping system requirements very low and remaining affordable.
A seventh-generation i3 computer is good enough to operate our Hermes, and only a 10-15 MBps connection is needed to broadcast without latency, while a 5MBps connection is needed for the client to enjoy the stream. Even 4G is sufficient and any cam platform or content creator who is Terpon-ready will have immediate access to all of these technological advancements.
We hope the news of this patent deal being worked out brightens the day of anyone working with cams, and we look forward to working with all of you to help shape the emerging VR cam market into a thriving new vertical that is profitable for many and entertaining for everyone.
