16.10.2020

Ahern files suit against EquipmentShare

US based rental company Ahern Rentals has filed a patent infringement lawsuit against EquipmentShare, accusing the company of wilfully infringing its patented telematics technology as part of a four year campaign involving the theft of trade secrets, employee poaching and misinformation against Ahern.

The complaint, filed in U.S Eastern District court of Texas, seeks damages as well as an injunction against EquipmentShare’s further exploitation of technology based on Ahern’s patent.

Missouri based EquipmentShare was set up between 2014 and 2016 by brothers William and Jabbock Schlacks as a sort of virtual equipment sharing platform between contractors to improve equipment utilisation with the aspiration to become the “Airbnb of construction”.

However according to Ahern’s complaint “the platform struggled to make an impression on the market so the company moved into the traditional equipment rental business and launched an ambitious plan to saturate the construction rental market by opening upwards of 100 locations a year until the company could be sold or go public. It took advantage of Ahern’s lack of non-compete agreements to poach 200 to 300 Ahern employees, leveraging Ahern trade secrets such as customer contact, sales, and pricing information, and bolstering this illicit conduct with misleading and defamatory statements about Ahern”.

The patent infringement involves U.S. Patent No. 9,133,330 and titled “Method and a System for Controlling and Monitoring Operation of a Device,” which has been owned by Ahern since rights were recently transferred to the company by its inventor, Daniel Abshire.

The patent allows the equipment’s owner to limit equipment to the period of time authorised in the rental agreement, with a pre-programmed authorisation code taking effect at the start of the rental period and expiring at the end, at which point the equipment will no longer function. The technology also permits remote lockdown of the equipment if any attempt is detected to disable the authorisation code.

Ahern’s complaint specifically alleges that in 2016 a pair of EquipmentShare executives, who knew and done business with Abshire and were aware of the ’330 patent, proposed a meeting between the inventor and EquipmentShare’s co-founder Jabbock Schlacks. It adds that EquipmentShare’s own remote monitoring technology had suffered recurrent glitches and the executives suggested to Schlacks that licensing or purchasing the ’330 patent would resolve the issues. During the meeting Schlacks fired technical questions at Abshire for several hours, taking notes on his laptop throughout. The complaint also asserts that Schlacks told Abshire that EquipmentShare was prepared to offer the inventor money and stock options for the rights to the ’330 patent. EquipmentShare then halted all communication with Abshire and stopped responding to his messages, dropping any suggestions of buying or licensing the patent. Shortly thereafter, according to the lawsuit, EquipmentShare reportedly fixed the problems bugging its Track system and a special group the company had formed to tackle the glitches was disbanded.

Ahern’s lawsuit contends that the sudden fix was accomplished with information gleaned from the meeting with Abshire and infringes on his ’330 patent. It also says that EquipmentShare filed its own patent application with the U.S. Patent and Trademark Office, describing functionality of its system that directly mimics Abshire’s patent. Its application failed to mention either the ’330 patent or the meeting. Lacking the resources to enforce his intellectual property rights on his own, Abshire assigned them to Ahern.

Ahern said: “The EquipmentShare Track system’s use of a dedicated authorisation code for each piece of rental equipment, which either permits or prohibits its operation depending on whether the user enters the matching code, also induces patent infringement on the part of anyone who rents from EquipmentShare and uses the Track system.”

“EquipmentShare was established by people with little apparent experience in the industry, whose technology product did not work as planned. As a result, it moved into the rental sector and tried to copy Ahern’s hard won, decades long success through taking trade secrets. EquipmentShare’s shameless misappropriation of patent technology is only the latest manoeuvre by a company that does not seem to have the patience to try to earn market share. We will pursue our rights vigorously in court.”

EquipmentShare's response

We asked EquipmentShare for its comment on the legal proceedings and it sent us the following statement:

“Since its founding in late 2014 EquipmentShare has been connecting equipment and job sites through technology to empower contractors and other construction industry professionals to take a revolutionary leap forward in increasing efficiency, productivity, and safety in all aspects of their businesses. Unlike most equipment rental companies, EquipmentShare utilizes its robust cloud platform to power its fleet, giving contractors and construction professionals jobsite visibility to accelerate productivity and reduce costly downtime.”

“As a team of innovators and problem solvers, EquipmentShare invites competition, which allows us all to continue to improve and iterate. That said, we do not take it lightly when our integrity is challenged and attacked by a company who missed the boat when it came to evolving its business strategies. Although we are still reviewing the petition, we are fully prepared to refute these unfounded claims against our company. It appears that last month Ahern acquired a patent from a third party for the express purpose of filing the instant lawsuit to continue its ongoing abuse of the court system. EquipmentShare feels strongly that Ahern’s claims will fail and intends to vigorously defend against them.”