Meta has been ordered to pay Walkie-Talkie messaging app creator Voxer $175 million as a fine. A jury in a Texas federal court found that the social media giant violated two live-streaming patents. Meta violates the patent on its Facebook Live and Instagram Live. The patents were developed by Voxer co-founder Tom Katis, a U.S. Army veteran. Katis team were ambushed in the Kunar province in 2003. He developed the technology while addressing shortcomings in battlefield communication after the ambush.
Katis and the team began developing communications solutions in 2006. This resulted in new technologies capable of transmitting real-time voice and video communications. Voxer was founded in 2007 and the Walkie-Talkie app was launched in 2011.
Meta to appeal the Voxer fine decision
Court documents allege that Meta, then known as Facebook, partnered with Voxer. This happened shortly after the app’s launch in hopes of partnering with the app. By February 2012, Voxer had disclosed to Meta its patent portfolio and proprietary technology. However, both companies did not reach any agreement. Ironically, Meta marked Voxer as a competitor. This is suspicious because, at the time, Facebook didn’t have its own live video or voice products. Meta then revoked Voxer’s access to key components of Facebook’s platform. Subsequently, Facebook launched Facebook live in 2015 and Instagram Live in 2016.
Katis and a Facebook senior product manager met at Facebook Live in 2016. Katis claims he had the patent infringement discussion with the manager. However, Meta did not want any agreement with Voxer. Interestingly, it continues to use Voxer’s technology for its gain.
The jury’s unanimous verdict in the case awards Voxer a total of $174,530,785. Meta will have to pay the sum through current royalties. However, Meta will not back down easily, the company says it will appeal the decision.
“We believe the evidence at the trial indicates that Meta did not infringe Voxer’s patents,” a company spokesperson said in response. “We intend to seek further discharge, including an appeal.”
Meta to cut costs by 10%
Over the next few months, Meta will cut costs by 10% or more. Some positions will be shed in the process of business restructuring, which is also one of the measures to cut costs. The second-quarter earnings report released in July showed that the company’s costs increased 22% year-on-year to a total of $20.4 billion. To spur growth, the company has invested heavily in the Metaverse, but so far nothing has returned. Not only that, revenue in the second quarter also declined year-on-year, and Meta also expects a decline in the third quarter.
Meta’s chief product officer, Chris Cox, has told employees that the company is in a difficult time, with strong headwinds. Cox also said teams shouldn’t expect a slew of new hires and bigger budgets at a time when the company is pursuing better execution in a slowing growth environment. Meta shares have fallen 56% so far this year, while the S&P 500 is down less than 20%. At Nasdaq, it is down about 26%.