Mike Isaac

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Nest Takes Honeywell Patents Back to the Drawing Board

While the Apple versus Samsung patent trial got most of our attention this summer, another intellectual property suit stirred silently in the background: Nest versus Honeywell International, the designer thermostat outfit against the aerospace/consumer tech giant.

Nest has filed requests to challenge the validity of Honeywell’s technology patents, the IP of which Honeywell is using to sue Nest for encroaching on Honeywell’s existing technology.

Nest’s latest strategy: Cut Honeywell off at the pass before it even gets to trial.

To do so, Nest took its argument to the United States Patent and Trademark Office, challenging the seven Honeywell patents asserted in the ongoing case. This essentially puts the patents back in front of the USPTO’s examination team, where it can uphold or invalidate the IP.

“From our perspective, we don’t think these patents are valid, as they all contain very incremental improvements to existing technology,” Nest general counsel Richard Lutton told AllThingsD in an interview. Lutton joined Nest in April; a decade-long veteran of Apple Inc., he managed that company’s massive patent portfolio.

The case speaks to the larger theme of Silicon Valley warfare that has received much attention recently: Tech companies can no longer only concern themselves with being innovative — they must insure themselves against the threat of litigation from other competitors who dabble in similar markets. For larger companies, the safest way of doing this is gobbling up other companies for their patent troves — something Google did last year in acquiring Motorola (among other reasons).

Nest’s move toward reexamination is a smart one, however, precisely because it cuts to the root of the problem. Invalidating the patents would weaken Honeywell’s footing when the two companies eventually reach trial. And, for now, the court has granted Nest’s request for a stay, putting the trial on hold until the USPTO’s reexamination process is complete.

As of Wednesday, I’m told that the USPTO has rejected claims found in five of the seven asserted Honeywell patents thus far. Three of them have much to do with the circular design of the thermostat, and the internal mechanics involved in having such a round design. (Shapes, as you may recall from the Apple-Samsung trial, have been a point of contention lately.) Another has to do with the “natural language prompts” Nest employs for programming the thermostat, while the fifth deals with “power-stealing” — a method that Nest uses to charge its internal battery by feeding off of an HVAC circuit.

The remaining two patents are still under reexamination by the USPTO.

It’s a logical maneuver, especially considering that, against the Goliath Honeywell’s coffers, Nest is a veritable David. And a relatively unarmed one at that: Unlike Honeywell, Nest has no patent portfolio to fall back on and offer as counterclaim to Honeywell’s assertions. Moving the battle away from immediate trial and over to the Patent Office for reexamination seems an intelligent first move.

Honeywell’s stance remains firm, citing that Nest’s call for reexamination is common to patent-infringement suits.

“Honeywell stands by its claims of patent infringement by Nest Labs, and we are confident the Patent Office will affirm the validity of our patented intellectual property related to thermostat technology,” a company spokesman told AllThingsD in a statement.

Even if the Patent and Trademark Office rejects the claims of all seven of Honeywell’s patents in question, the battle will be far from won. Honeywell could attempt to narrow the claims of its patents to the point where the USPTO will find the patents acceptable. Or Honeywell could present evidence that shows why the USPTO got its judgement wrong when it chose to reject the patent claims.

Whatever plan of attack the companies take from here, one thing is certain: It’s not going to be a quick process. With the potential for rebuttal on both sides, reexamination disputes can go back and forth for one or two years — and that’s before ever seeing the inside of a trial courtroom.

Bottom line for today: There’s no injunction against Nest to cease sales at the moment. You’re still able to buy whatever thermostat you want, Honeywell or Nest, and if that ever changes, it won’t happen for at least a few years.

For now, it’s back to the patent office drawing board.


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— Ryan Chittum, writing in the Columbia Journalism Review about the promise of Pierre Omidyar’s new media venture with Glenn Greenwald