Posted October 15, 2020

Ahern Rentals files lawsuit against EquipmentShare

Ahern Rentals, Inc has filed a patent infringement lawsuit against EquipmentShare; claims four-year campaign of misinformation, trade-secret theft and employee poaching against Ahern.

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

Founded in 1953 and still family-owned, Ahern provides a full range of large, specialized construction equipment including heavy-duty digging, high-reach, and landscaping machinery. Its customers include leading industrial and residential developers, as well as municipalities and owners of utility, hospitality, entertainment, sports and other large buildings and sites. Ahern operates nationally and has company-owned locations in more than 30 states.

Missouri-based EquipmentShare was initially established to share rental equipment between owners and operators. News reports at the time described the company as aspiring to be the “Airbnb of construction.” However, when its equipment sharing model didn’t work, the company was forced into the brick-and-mortar equipment-rental business, in direct competition with Ahern.

According to Ahern’s complaint, EquipmentShare 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 at issue in Ahern’s lawsuit, U.S. Patent No. 9,133,330 and titled “Method and a System for Controlling and Monitoring Operation of a Device,” is owned by Ahern since rights were transferred to the company by its inventor, Daniel Abshire.

The ’330 patent governs keyless digital technology that allows Ahern, as the equipment’s owner, to limit equipment use to the period of time authorized by Ahern and paid for by the renter. A pre-programmed authorization code goes into effect at the start of the rental period and expires at the end, after which the equipment no longer responds to attempts at operation. The technology also permits remote lockdown of the equipment if any attempt is detected to disable the authorization code. This technology, enables suppliers to prevent wear and tear – as well as unauthorized use – of rental equipment out in the field or left on building sites, the report states.

Ahern’s complaint alleges that around 2016, a pair of EquipmentShare executives, who had previously known and done business with Abshire and were aware of the ’330 patent, proposed a meeting between the inventor and EquipmentShare co-founder Jabbock Schlacks.

According to the complaint, 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 troubles. The complaint states that during the meeting, Schlacks peppered Abshire for several hours with technical questions, taking notes throughout on his laptop. The complaint further asserts he told Abshire that EquipmentShare was prepared to offer the inventor money and stock options for the rights to the ’330 patent.

Following the meeting, says the complaint, EquipmentShare halted further communication with Abshire; it stopped responding to his follow-up messages and dropped any pretense of buying or licensing the ’330 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.

In a more brazen act, states the complaint, 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 company’s meeting with Abshire.

Lacking the resources to enforce his intellectual property rights on his own, Abshire assigned them to Ahern.

As the complaint describes, EquipmentShare reconfigured and corrected its Track system with methods taken from Daniel Abshire’s patent, which constitutes willful infringement of Ahern’s intellectual property rights.

“The EquipmentShare Track system’s use of a dedicated authorization 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,” An Ahern representative stated. “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 maneuver 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.”

The complaint is captioned Ahern Rentals, Inc. v., Inc. Ahern is represented in the lawsuit by the Dallas office of national law firm McKool Smith.