August 4, 2020

Triller alleges patent infringement by TikTok

Partner Andrew Scott explains how Triller is leveraging its IP rights to get a seat at the table.

When it comes to creating music video compilations and posting them online for billions of people to see, I prefer organizing my sock drawer. And that was no different back on 11 May 2015 when Triller founders David Leiberman and Sammy Rubin filed a patent application in the USA for their mobile phone app. The technology they’d created enabled users to create a ‘music video’ including an audio track synchronized with multiple video takes of personal film footage. Fast forward to 2020 and Triller is the third biggest player in its market with a modest, but respectable annual revenue of around $1.1 million.

The unicorn-in-the-room, as even the most avid sock drawer organizer would know, is TikTok. This phenom has roots extending back to Chinese app Douyin in 2016 and in the USA in 2015. It has since grown to be installed on 189 million devices in the US alone, with a global revenue of $17 billion in 2019.

On 27 July 2020 Triller emailed TikTok informing them that they had launched infringement proceedings.

Against this backdrop is a geopolitical environment where TikTok is alleged to be sharing personal user data with the Chinese government and the incumbent President of the USA is posturing for re-election. Rumours are circulating that Microsoft may end up acquiring the sole interest in TikTok’s platform in the USA. It is easy to see how Triller’s small voice could go unnoticed.

But the US District Court for the Western Division of Texas doesn’t wait for anyone. By filing the infringement proceedings in that jurisdiction, renowned for small towns and pottery, Triller has a chance of hitting the big time. The Court has a history of plaintiff-friendly juries handing out verdicts running to tens and hundreds of millions of dollars. This, combined with the ubiquitous nature of social media and the implementation of relatively simple technology, means that Triller has more leverage than might otherwise be expected from a single granted US patent. Given the pace of technological change, and a general preference for settling contentious matters on commercial terms rather than engaging in protracted legal proceedings in the USA, Triller could yet still realise its potential.

Intellectual Property rights should be viewed as business tools. Without filing that patent application in 2015, Triller’s trajectory could be set for terminal decline in an industry where network effects produce dominant enterprises. Instead Triller’s legal rights, enforced at an opportune time geopolitically, have provided it with commercial leverage and a chance to share in some of TikTok’s unicorn sparkle.

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