Companies Fight Over Facial Recognition at School District

Lockport City School District in New York has bought facial recognition software, a controversial move on its own. But the district is now caught up in a separate controversy — who actually made the software?

by Connor Hoffman, Lockport Union-Sun / March 11, 2019

(TNS) — A controversial facial and shape recognition security camera system has landed the Lockport City School District in New York in the middle of a licensing dispute between two foreign companies, with one requesting documents from the district.

District officials are using $1.4 million of the allocated $4.2 million Smart Schools Bond Act funds to install the Aegis software suite, which has been purchased from Ontario-based SN Technologies. The suite includes facial and shape recognition software as well as a forensic search engine.

As of last week, district officials said they currently do not have a date set for implementation of the system. The district is currently working with the New York State Education Department to craft a policy that protects the privacy of student and staff.

On Jan. 3, LCSD received a Freedom of Information Law (FOIL) request from Albert J. Boro Jr., a lawyer whose firm is representing BrainChip, Inc., inquiring for a vast amount of documents. The Union-Sun & Journal was provided a copy of the FOIL request from district resident Jim Shultz, who requested the document.

In the letter, Boro explains that BrainChip, Inc., is "a leading provider of neuromorphic computing utilizing the Spiking Neural Networks (SNN) for machine learning with applications that include facial and object recognition."

BrainChip is based in Sydney, Australia.

Boro adds that BrainChip has a license agreement with SN Technologies for use of BrainChip's facial recognition software in the Aegis product, and they contend that SNTech owes the company around $600,000 in license fees for the installation at LCSD.

The FOIL request asks for any records from the school district related to the discussion and implementation of the Aegis software suite. Among the specific items requested are:

  • Any records reflecting the due diligence undertaken by Lockport in selecting the video surveillance product and facial recognition software
  • Any records reflecting any meetings at the Erie-1 Board of Cooperative Educational Services in which the software was discussed or demonstrated
  • Any records reflecting any demonstrations or beta testing of the software
  • Any records reflecting the selection or use of BrainChip or Spikenet facial recognition software
  • Any records reflecting Lockport's financial arrangements with SNTech, Tony Olivo, Corporate Screening and Investigative Group, LLC, and/or Ferguson Electric Construction Co.
  • Any records reflecting non-disclosure agreements

In a June 2018 investors presentation, BrainChip officials said they invoiced SNTech for $609,135 "based on the existing licensing and development agreement" and that SNTech had disputed the invoice. Officials said they are taking all "necessary steps" to ensure that the invoice is "paid in full."

BrainChip had announced, in a September investors presentation, that they had initiated a full audit of SNTech's books, records and source code.

In a January presentation, BrainChip told investors that the audit of SNTech's books and records "proved unsatisfactory with respect to disclosures." They filed the FOIL with Lockport to "provide further insight on the deployment, parties involvement and payments made by Lockport."

K.C. Flynn, one of SNTech's partners and a company spokesperson, denied that they used BrainChip's software with the Lockport project.

"SNTech had the ability to license BrainChip's software for the Lockport school system and to include it in our Aegis application, but we had no obligation to do so," Flynn said. "SNTech decided to install Aegis, without any software from BrainChip, as a newer solution provided substantially better results around detection and matching of face and for weapon detection, as required by the software and in support of the Lockport district school contract."

Flynn added BrainChip has not taken any legal action against SNTech, and they do not expect any action will be taken based on communication with both companies lawyers, who last communicated on Oct. 29.

When reached by telephone earlier this week, Boro declined to comment because he had not received the documents in response to his request.

Shultz criticized district officials regarding this latest development.

"From the start, the school district foolishly entrusted the security of our students into the hands of shady people looking to make a fortune off our fears," Shultz said. "Now it appears that the consultants and company involved didn’t even own the system they sold us. It’s just one boondoggle stacked on another."

When asked what the district's understanding of who developed the software was, Superintendent Michelle Bradley said, in an emailed statement, the district always understood SNTech to be a distributor of the Aegis facial recognition system.

"The District understood SNTech to be a distributor of the Aegis System. The real-world reality is that vendors/distributors often have a variety of sub-contract and other third-party arrangements that contribute to a final product that is made available to the District," Bradley said. "The bottom line is that the District focuses on the capabilities and qualities of the final product, and does not generally require vendors to describe the background arrangements involved in developing and providing the product. The entity with which the District contracts for the product is then contractually responsible to stand behind the product, regardless of the relationships and arrangements that may have existed in the background with respect to the product."

Bradley added that the district is not concerned about the dispute between BrainChip and SNTech affecting upgrades and maintenance of the system because the district has a contract in place with Ferguson Electric, and the contract includes provisions for ongoing maintenance of the Aegis system by SNTech.

The district has processed the FOIL as appropriate, Bradley said.

She concluded by saying the dispute "had absolutely no bearing on the district's implementation schedule for the Aegis System."

"To the contrary, the District has continued to communicate with SED, and has refined District policies relative to the Aegis System implementation, to ensure that implementation is consistent with New York’s privacy standards," Bradley said. "In addition, the District has been monitoring the State’s development of implementing regulations for New York Education Law Section 2-d, dealing with data privacy and security. These considerations solely have guided the District’s schedule regarding implementation of the Aegis System, as the District has been committed to implementing these enhanced security measures in a responsible and thoughtful manner."

©2019 the Lockport Union-Sun & Journal (Lockport, N.Y.). Distributed by Tribune Content Agency, LLC.

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