Honeywell hits Nest with a law suit over smart thermostat

The Nest thermostat (in cooling mode).

Thermostat giant Honeywell (s HON) has filed a lawsuit alleging patent infringement by the buzzy Silicon Valley startup Nest Labs, which makes a smart learning thermostat. Honeywell has spent decades developing thermostat technology and just last week the company told me it had developed and tested learning thermostat technology, like the kind Nest has introduced, but that it had decided not to commercialize the learning tech after weak user response.

Honeywell says its patent infringement lawsuit, which was filed in the U.S. District Court in Minnesota and also targets Best Buy that sells the Nest tech, applies to thermostat intellectual property including:

  • Natural Language Installer Set Up for Controller
  • Controller Interface with Dynamic Schedule Display
  • HVAC Controller
  • Thermostat with Mechanical User Interface
  • Thermostat with Offset Drive
  • Power Stealing Control Devices
  • Profile Based Method for Deriving a Temperature Setpoint Using a ‘Delta’ Based On Cross-Indexing a Received Price-Point Level Signal.

Beth Wozniak, president, Honeywell Environmental and Combustion Controls, said in a statement about the lawsuit that “Competition is good and we welcome it, but we will not stand by while competitors, large or small, offer products that infringe on our intellectual property.”

I met with Wozniak last week and she told me that connected thermostats are still a small part of Honeywell’s overall thermostat sales, and that it’s the very early days of the connected thermostat market. Honeywell sells a whole host of other connected home products such as humidifiers and security systems, and a “total connected home system.” Honeywell has been focused on adding intelligence to digital and connected thermostats through simple UI, mobile apps, and partnerships like its one with Opower.

Energy software startup Opower will be providing the analytics and data to help Honeywell use home and building thermostats for demand response programs, where utilities can ask home owners to turn down their heating and cooling slightly during peak times of day. The Opower thermostats are being piloted with utilities right now, including at PG&E.

Nest officially launched its learning thermostat late last year, and the product was designed and created by Tony Fadell, the former chief architect at Apple (s AAPL), who led the development of the iPod and the first three versions of the iPhone. The company is backed by funding from Kleiner Perkins, Google Ventures and Al Gore’s investment fund. Nest says it has developed the world’s first learning thermostat and that its thermostat can save home owners 20 to 30 percent on their energy bills.

Here’s an unboxing of the Nest thermostat:

And an onstage interview with Tony Fadell, founder of Nest: