Why Snapchat Just Spent $7.7 Million For A Geofilter Patent

 
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  • 2 min read
 

According to Snap’s S-1 filing for its IPO, 90% of the company's $400 million dollars in revenue that the company has had so far has been from selling geofilters to Snapchatters, businesses, and brands (tap here if you need to learn more about what a Snapchat Geofilter is). 

Surprisingly enough, Snapchat (or Snap Inc. as their new parent company is now called) has not owned the patent for geofilters this entire time. Meaning, the now billion dollar company has been infringing on the patent this whole time.

Instead, a small startup from 6 years ago called "Mobli" actually patented the idea of geofilters in 2012.

According to an email obtained by TechCrunch, Snapchat has now finally acquired the patent for geofilters for $7.7 million dollars from Mobli.

 
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What Does Snapchat's New Geofilter cover?

The patent (US#20160373805, US#9459778) was named "Methods and systems of providing visual content editing functions". 

What does Snapchat's new Geofilter patent mean in english? 

The geofilter patent covered server-side filters. Before, Snap had to update the Snapchat App every time it wanted to add a new set of geofilters. 

Now, Snapchat no longer has to do this and can release new Geofilters pretty much instantaneously.

What does Snapchat's New Geofilter Patent Mean For Facebook?

Not surprisingly, Mobli claims that Facebook was very interested in the geofilter patent and Facebook pushed to obtain it before Snapchat could do so.

However, the story is still unfolding and according to other Silicon Valley sources, Facebook never tried to do this. When Facebook was asked on this matter, their response was simply "no comment".

Why Did Snapchat spend almost 8 million for this geofilter patent?

Typically, the price of a patent can range from $300 to $10,000. However, when it comes to billion dollar tech companies (Snap is currently worth 25 Billion dollars), some patents can even exceed millions of dollars. 

Had Facebook purchased this almost $8 million dollar patent, Snapchat would simply not be able to sell geofilters anymore. Losing this patent would have been an enormous blow to the future of Snap as 90% of it's revenue is being made with selling geofilters.

This was a huge battle in Facebook's war against Snapchat and it certainly won't be the last. If Snapchat is going to continue to remain relevant and achieve it's hopes of "being the next Facebook", the company needs to continue to strive to always be one step ahead of Facebook.