Snap Pays $7.7M For Geofilters Patent From Mobli

Snap, the operator of the Snapchat messaging app, has spent $7.7 million to acquire a critical patent for geofilters.

According to a report in TechCrunch, of Snap’s $400 million in revenue, $360 million comes from selling geofilters or photo filters based on location that are available for advertisers to purchase. Snap had never owned the patent to geofilters until late last week when it acquired it from Mobli, an Instagram competitor. According to the TechCrunch report, the $7.7 million deal is the highest amount a company paid for a patent from Mobli, based in Israeli. Mobli confirmed the deal in an email obtained by TechCrunch. Sources told TechCrunch that Snap purchased the patent to protect itself from any litigation in the future. Mobli had approached Facebook initially about selling the patent, with a source saying Facebook wanted it. Another source said Facebook hadn’t been offered the patent and that Mobli wasn’t even on the radar screen of local power players in Silicon Valley. Had Facebook gotten its hands on the patent, it would have hurt Snap’s ability to get sales from geofilters, destroying its main source of income, noted the report.

In recent weeks Snap has been in the news, and not only for launching news products or becoming a publicly traded company. Earlier this month it unsealed a lawsuit from a former employee who contended in a lawsuit in January that Snap inflated its user base and alleged that Snap tried to get him to break agreements he made with Facebook. According to a report in The Financial Times, the employee had asked a judge to unseal the lawsuit, but before a judge could rule on that request, Snap did just that. Snap is dismissing the charges lodged by Anthony Pompliano, who worked at Snap for three weeks, saying it was a “publicity stunt” and that he was fired for poor performance, reported the FT.

“The simple fact is that he knows exactly nothing about Snap’s current metrics. He and his lawyers are — not to put too fine a point on matters — just making things up,” Snap’s lawyers said in a new filing covered by the FT. “That is why Snap has nothing to hide, especially now that it is a public company.”