Warner Bros. swiped our Harry Potter wand IP, says Kano

Kano, the venture-backed U.K startup known for its build-your-own computer kits and software for teaching coding and associated STEM skills, has accused Warner Bros. of copying one of its products and infringing on its intellectual property (IP).

The product in question is the Harry Potter: Magic Caster Wand that Warner Bros. announced back in October, and which began shipping to consumers in the U.S. and U.K. for $150 just before Christmas. London-based Kano issued a “cease and desist” to Warner Bros. this week, which TechCrunch has seen, requesting that the media and entertainment giant halt its go-to-market and promotional activities.

While Kano is probably better known for its Raspberry Pi and Windows-based modular PCs, the company launched a device similar to Warner Bros.’ new wand way back in 2018. Kano’s Harry Potter Coding kit came replete with a physical gesture-controlled Bluetooth wand designed to engage children through coding spells, making on-screen cauldrons change color, or feathers fly, via elaborate swishing motions with the wand.

Powering the wand are various sensors, including an accelerometer, gyroscope, and magnetometer, which help the wand convey its direction and motion to the tablet or PC it’s connected to.

In the intervening years, Kano says it has sold some 180,000 units of its Harry Potter coding wand, a figure that rises to 460,000 when you factor in similar gesture-controlled products Kano subsequently launched in partnership with Disney spanning the Star Wars and Frozen franchises.

While Kano is no longer actively marketing its Harry Potter wand, some of its retail partners — which have previously included Apple and Target — do still sell it.

Patented

Last April, Kano cofounder and CEO Alex Klein was granted a patent for the wand’s gesture recognition system, covering the basic mechanics of how it works: the user holds down a button to begin the gesture recognition, the screen displays a cursor trail as the user moves the wand to show how a spell is being cast in real-time.

It’s worth noting that Kano launched its wand as part of a brand-licensing partnership with Harry Potter rightsholder Warner Bros., which is why Klein says he was perturbed to learn of its new competing wand hitting the market a few months back.

In a conversation with TechCrunch, Klein explained that off the back of the initial success it saw with the Harry Potter wand in 2018, Warner Bros.’ corporate arm reached out to Kano to get it to explain a bit more about how the product works, including its componentry and how it’s able to recognize spells, and other potential use-cases for the underlying technology.

And this is where things get interesting regarding its spat with Warner Bros.

Unlike Kano’s original Harry Potter wand, which was focused squarely on teaching kids how to code, Warner Bros.’ Harry Potter Magic Caster Wand is all about the smart home. It’s designed to connect to devices such as TVs, lights and speakers, so users can control their contraptions using “spells” and choreographed wand gestures.

According to Klein, Kano had already envisaged such use-cases with its own wand, and had made some early developments in the smart home realm.

“In the process of making it easy for a person to hold down the button on the wand and cast a spell, we realized that this is a new language for human computer interaction,” Klein said. “You could be casting spells not only to make Bertie Bott’s Every Flavour Beans explode on a screen, but you could [also] be doing gestures to control your lights, unlock your door, and control the volume of music. We realized that this gestural form of interaction could be quite powerful and extended into other domains in the smart home. So we came in, they [Warner Bros.] got really excited about this idea of controlling the smart home.”

Klein showed TechCrunch a video of an early prototype of Kano’s wand controlling various connected devices, which he says was recorded in November 2018, as part of a demonstration in Warner Bros.’ offices.

Fast-forward to 2022, and with Warner Bros. bringing a similar Harry Potter wand to market, Klein says that he reached out to various people at the company to get an explanation, adding that he was told that an internal investigation would follow. But he said the line of communication went cold, leading to the cease and desist letter that Kano issued to Warner Bros. this week.

“A side-by-side comparison of the operation of both the Coding Wand [Kano’s] and the Spellcaster Wand [Warner Bros.’] makes clear — and has now made clear to multiple third-party observers, including patent and intellectual property experts — that an issue has arisen,” the letter states. “The new product uses intellectual property — multiple patent-protected assets, trade secrets, inventions, etc. — of Kano’s, some of which were shared in strict confidence with WB during the many detailed engagements between the companies.”

The story so far

Founded in 2013, Kano has raised some $45 million in funding from notable backers including European VC Index Ventures, Barclays, Salesforce cofounder Marc Benioff, and Microsoft, which worked with Kano to develop a Windows-based PC back in 2019.

Mark Zuckerberg is also apparently a fan of Kano’s products, according to this post from 2021.

However, Kano had been relatively quiet these past few years, announcing a round of layoffs in late 2019 and then not really releasing much in the way of new products. However, in 2021 the company did partner with Kanye West to launch Stem Player, a device that lets users isolate and remix individual song elements. It ultimately pulled back from the partnership due to antisemitic comments made by West.

Today, Kano continues to sell the Stem Player without West’s involvement, and a few weeks back the company unveiled the Stem video Projector, while hinting at all manner of new products that may include food and clothes. The company also signaled its transition away from its legacy DIY PC business when it revealed it was spinning out its creative software suit Kano World as a standalone business.

However, the company does plan to stay at least a little bit true to its roots, as it’s developing a modular two-in-one device that can run Windows or ChromeOS, which Klein said it expects to push to market some time this year.

Financially, things hadn’t been looking so great for Kano. At its most recently reported financial year ending of March 2021, Kano disclosed a pre-tax loss of £10.1 million ($12 million), though this was an improvement on the £16.8 million ($20.8 million) loss it reported the previous year. The company told TechCrunch a few weeks back that its provisional accounts for fiscal year 2022 show a pre-tax profit of around £1.2 million ($1.5 million).

What’s next

While Klein is naturally keen to paint an outwardly rosy picture of how things are going at Kano, the fact that it’s actively releasing and developing new products is an encouraging sign. However, a litigious IP scuffle with a billion-dollar, mass media conglomerate is probably the last thing it needs right now.

In a modern-day David vs Goliath scenario, defending IP rights in court as a relatively small startup is not a cheap pursuit — something that Klein is acutely aware of as he considers his next moves.

“It can cost up to $3 million to defend and protect a patent / technology IP,” Klein said. “This stacks the deck in favor of the big corporates. They can afford to throw aggressive lawyers at smaller companies and tie them up in process.”

There is nothing to say, at the moment at least, that this is definitely how things will unfold. But if it does, Klein indicated that he’s willing to do whatever it takes to defend Kano’s work, noting that he has been told by lawyers who have worked on the case so far, on a pro bono basis, that it’s “pretty open and shut.”

“If necessary, I’ll work late nights and weekends and represent us myself, pro se,” he said. “We will make sure our team’s hard work and creativity is not abused and ripped off. I may not have gone to law school, but all the proceedings are public, and can be understood with a little elbow grease.”

A Warner Bros. spokesperson finally provided TechCrunch with a comment, saying: “The claims made by Kano are without merit.”*

*This story was updated shortly after publishing to include a response from a Warner Bros. spokesperson.

Warner Bros. swiped our Harry Potter wand IP, says Kano by Paul Sawers originally published on TechCrunch