Snap Inc (NYSE:SNAP) has obtained the patent for Geofilters from Mobli for $7.7 million. The Geofilters are the Snap’s main source of revenues accrued by selling to the advertising companies. The company made about $360 million revenues from the Geofilters or the phot filters in the last financial year. With a patent of their own, Snap is expected to increase its sales in the near future.
Mobli which patented the Geo-filters in 2012, sold the rights to Snap recently for $ 7.7 million, which is perceived to be the highest amount a patent has ever been purchased from the Israel owned technological industry. The most expensive patent ever sold in Israel was $2.7 million by the Google Maps. Some sources revealed that Snap was prepared to spend higher on acquiring the patent for Geofilters to protect itself against from any legal actions.
For a number of weeks, Snap has gone through tough moments since the recent IPO proceeds when its parent company Snapchat took the defense against some Wall Street analysts who claimed that the company is overvalued and yet it’s showing signs of slow growth compared to its competitors like Facebook. Some sources disclosed that Mobli initially wanted to sell the Geofilter patents to Facebook however, the sources from Silicon Valley denied such allegations. If Facebook could have secure the Patent, the Snap’s main source of revenue would have been completely destroyed.
The patent would cover the server-side photo filters hence the filters would be generated directly from the main server and not the app. This means that there would be no need to update the filters every time as there will be a new Geo-photo filter to push the new applications continuously. The public primarily had raised concern about how Snap would spend the revenues it obtained from the recent initial public stock offering. By purchasing the patents, it’s clear that Snap is protecting its interests in the tech-driven industry. The company will now protect itself from competitive brands such as the Sketchers, Starbucks, and Wendy who have for a long time sponsored the Geofilters.