Responding to ADT Lawsuit, Ring Refunds ‘Protect’ Pre-orders, Promises New Model
Ring refunds preorders for Ring Protect, Best Buy pulls promos, smart home and security industries pray for ADT win in lawsuit claiming Ring stole IP from Zonoff, ADT’s development partner.
Ring Protect, the new security and home-automation system from Ring (Bot Home Automation), has been banished for now, having lost the first round in a lawsuit filed by ADT. ADT claims Ring stole intellectual property from Zonoff – ADT’s software-development partner – as Zonoff was shutting its doors and kissing a $36 million ADT investment goodbye.
The judge in the case issued a temporary injunction order, prohibiting the defendant from selling Ring Protect at this time. A final resolution of the case is still to come. Ring Protect is still on display at Best Buy, but with promotional materials removed. And Ring itself has cancelled preorders for Protect. In a letter to customers, exposed by Consumer Reports, Ring writes:
Unfortunately, we are unable to fulfill your pre-order at this time due to a legal dispute with ADT. We believe this case is without merit and will continue to vigorously fight this in court. Rest assured that we will be releasing a new version of Ring Protect in the coming months. In the meantime, we will be refunding the full amount of your order.
We appreciate your commitment to Ring, and are offering a $50 promo code* that you can use toward a Ring Doorbell or Outdoor Camera …
Presumably, the new version of Ring Protect would exclude “trade secrets” allegedly belonging to ADT, which contributed a large chunk of intellectual property (and $36 million) to the Zonoff Z1 platform allegedly pilfered by Ring.
Consumers are praying that Ring prevails in the case because the new product and related service is mind-numbingly cheap and users already love their Ring video doorbells.
On the other hand, the security and smart-home installation industries are praying for an ADT win. The fact that Ring plans (planned?) to charge just $10 per month for its services could dramatically alter the course of the home-tech channel as we know it.
That $10 buys professional security monitoring, 60-day video storage for an unlimited number of Ring cameras and video doorbells, remote system monitoring and management, as well as cellular service for back-up. The nominal fee is unheard of, even in DIY circles, and probably unprofitable or a break-even proposition for Ring.
Ring has flipped the traditional security-industry business model on its head – using low monthly fees as the loss leader in order to sell more hardware. It’s an interesting idea, but “our” industry doesn’t want to see it happen.
Ring was founded in 2012 and has raised more than $209 million in venture capital, about half of which was raised in a January 2017 Series D round from investors including Kleiner Perkins Caufield & Byers, Goldman Sachs and DFJ Growth, according to Crunchbase.
Readers Respond to ADT vs. Ring
Commenting on CEPro.com, via email, and through our social-media platforms, some readers express ire at ADT’s “power play,” while others agree Ring flat-out stole ADT’s IP. Many others simply comment on the drama.
Here are some of the comments (edited for typos):
Concern for Ring
“Ouch. Their #29 ranking of top startup places to work could slip a bit.”
“I guess I'll have to hold off on trying it. Will be interested in how this plays out.”
“Not a good day for Ring or their investors.”
“The investors are going to be very unhappy about something that could have been avoided.”
ADT is a Bully, Ring is an Innovator
“Wow, all that investment into a technology that will get halted and never again see the light of day. While ADT skips off into the sunset using a different technology. Some power moves going on here.”
“The next wave of IoT connectivity will bring services that will cost consumers half of what Ring is offering today. It's good for the industry to see fresh ideas busting up a stale old party dominated by a select few. Cheers Ring! To your success!”
“for years ADT has provided piss poor systems that claim to be Smart....I have removed plenty of them after the home owner gets tired of crappy service, poor installs and continued failures...they deserve what they get which is hopefully nothing....”
Ring is Guilty
“It will be very difficult for Ring to defend itself if ADT did have superior rights and first-priority lien on Zonoff's assets.”
“Isn't it ironic how Ring - the company that claims to make products that protect people from stealing their stuff - actually stole IP and software from Zonoff/ADT to make those same products? Whether you love or hate ADT, this is a pure case of IP theft - not some big company trying to shut down an ‘innovator.’”
“It will be mind boggling if they can get away with this.”
Oh the Drama
“Well, this is interesting”
“Details of the case sound like scenes from Antitrust and The Social Network.”
Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Email Julie at firstname.lastname@example.org
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