In what has to be an unfortunate turn of events for Nest Labs, competitor Honeywell (NYSE:HON) filed a major patent infringement lawsuit against the company today over its critically lauded, bestselling Learning Thermostat. In the suit, which also names Best Buy (NYSE:BBY), Honeywell claims Nest Labs infringed on many of its patents while providing high-tech features as part of the device, which was released this past fall. The suit is attempting to stop all sales of the $250 thermostat, which, at present time, is sold out.
The suit names a number of patents that Nest Labs knowingly infringed upon, including a question-based operating system, where the device asks the user questions about their temperature preference, and a “power stealing” technology. Nest Labs publicly touted many of its innovations as “revolutionary” in its advertising, which Honeywell claims were actually proprietary to them.
The Learning Thermostat has been considered a major advancement over existing programmable thermostats, which many consumers claim were hard to use. Besides being easy to program and capable of setting schedules, the Nest Labs thermostat was also able to be operated independently from a smartphone or computer. Honeywell claims that it devised many of these ideas years ago, but according to Honeywell president Beth Wozniak, “consumers prefer to control the thermostat, rather than be controlled by the thermostat.” Honeywell also produces thermostats that are connected to the Internet, allowing for remote operational ability, and has recently partnered with Opower to create a system that will provide the user with recommendations on how to maximize energy efficiency.
Here’s how these stocks are reacting to the news:
Honeywell International Inc. (NYSE:HON): HON shares recently traded at $60.24, down $0.5, or 0.82%. They have traded in a 52-week range of $41.22 to $62.28. Volume today was 1,714,467 shares versus a 3-month average volume of 4,014,950 shares. The company’s trailing P/E is 23.06, while trailing earnings are $2.61 per share.
Best Buy Co. Inc. (NYSE:BBY): BBY shares recently traded at $24.48, up $0.62, or 2.6%. They have traded in a 52-week range of $21.79 to $35.45. Volume today was 3,589,881 shares versus a 3-month average volume of 6,560,450 shares. The company’s trailing P/E is 8.43, while trailing earnings are $2.90 per share.