Sonos Inc. and Lenbrook Industries announced today that they have reached a settlement agreement bringing the patent litigation brought by Sonos to a close. The agreement is confidential, so no terms were disclosed.
Another win for Sonos; Read on for more…
I first told you about the patent lawsuit brought by Sonos against Lenbrook back a little over a year ago. Sonos, fresh off of their win against the Denon HEOS brand, began sending threatening letters to a variety of companies, including Lenbrook. Somehow, Lenbrook got moved to the head of the line and a full scale lawsuit was launched.
Since the time their action against Lenbrook commenced, Sonos went on to tackle their largest foe (and friend) Google. That case, undoubtedly, will be their greatest challenge as Google has way more resources and a lot of experience in patent matters.
Sonos is 2-0 in Patent Litigation Wins
But Sonos is 2-0 in their patent cases, and more are likely on the way. But for now at least, their dance with Lenbrook has come to an end. Now, to Sonos, Lenbrook is just another paying customer.
Sonos is a company founded on innovation – it is part of our DNA. Nearly twenty years ago, we invented multi-room wireless streaming, and since then we have developed many of the innovations that enable today’s listening experiences and will also enable tomorrows. We welcome and encourage competition, and want to make sure that all companies entering this space recognize the strength of our IP and provide appropriate compensation. Today’s settlement reflects those principles.”
Eddie Lazarus, Chief Legal Officer for Sonos in a prepared statement
Lenbrook, at Least Initially, Fought the Good Fight
While this ending was probably inevitable, I was impressed with Lenbrook’s initial response to Sonos’ claims…and especially here in their formal court filing in response to the lawsuit. In the end, it may have been a case of “the mouse that roars,” but Lenbrook’s CEO demonstrated, to me at least, a good grasp of the nuances of IP disputes, and the unique elements of this particular situation from Lenbrook’s perspective.
At the end of the day, this is yet another win for Sonos. It will help to further fortify their patents and strengthen their legal position in future court battles…as a settlement is clearly a victory for team Sonos.
Lenbrook Declined to Comment for This Article
I reached out to Lenbrook for comment, but they declined and referred to their joint statement with Sonos.
Lenbrook and the brands we own have been in the premium consumer audio space for almost 50 years. Our record of innovation and critical acclaim across all our brands speaks for itself. We have partnered with more than 20 innovative technology companies in our quest to offer the market the highest performance and most advanced audio solutions possible. We are pleased that we have been able to reach an agreement with Sonos to end this patent dispute.”
Greg Stidsen, Chief Technology Officer for Lenbrook in a prepared statement
As Close to a Win-Win as Possible
Thanks to the upscale market position of Lenbrook’s Bluesound brand (the main area of dispute for Sonos), passing along a price increase to offset their new royalty payment will most likely not disrupt their sales too deeply. And certainly, having this lawsuit behind them will allow them shift their focus back to the more positive elements of running their business. So, in some small way, this solution is as close to a win-win as the parties could reasonably achieve.
See more about Sonos by visiting: sonos.com.
Learn more about Lenbrook’s Bluesound line at: bluesound.com.
So Ted, in light of the downgrade of their stock position and the real non-outcome of this “settlement”, what chance does Sonos have in the headwinds in the marketplace? Is their strategy to keep suing companies until something good happens?
Hi Glen,
The outcome of this settlement is that they have yet another revenue stream (licensing revenue). Most likely, more lawsuits will be forthcoming as the courts continue to find in their favor – or their opponents keep settling and paying them royalties.
Sonos believes that this world of COVID-19 favors their market position. Their products are easy to order, get delivered, and set up by the consumers themselves…all easy to do over the internet.
Their online sales (where they get to keep more of the margin) are continuing to increase and they are turning on a new “Services” spigot with their own ad supported streaming content.
We’ll have to see how successful all these ventures turn out to be. But I’m pretty certain that Sonos folks feel like they’re on a roll…
Ted
Sonos had the technology, market position and opportunity to create a licensing model many years ago. ‘Most’ brands would have looked at the dev cost/time involved in creating a streaming platform from scratch, then decided to take the license option. That would certainly have been the case for Lenbrook and other ‘smaller’ brands in this sector. However, Sonos did a ‘Nokia’ by allowing brands to develop, create a market position and then swoop. It’s easy to say the patents were readily available for brands to develop around; but in practice, their will always be areas of contravention. It does bolster Sonos in terms of market value, should a ‘would be’ buyer come knocking. The next one up, might prove a bridge too far for Sonos…….
Dean,
Thanks so much for your thoughts. I agree with you that the next one up (Google) could be a different story…or at least a greater challenge. Not only does the company possess greater resources than did the prior combatants (or even most countries, for that matter) – they have extensive experience in IP and the litigation surrounding it.
Sonos is on a roll for sure…but we may be in a situation where we’ll see what happens when “an unstoppable force meets an immovable object”…
Ted
In that case, there will only be one winner…….the lawyers. Let’s hope not!!