Air Date: 8-15-2014| Episode: 336
This week on IAQ Radio the Z-man will interview Restoration Industry Association (RIA) President Scott Stamper about the Thermapure litigation settlement. RIA and Thermapure, Inc. recently settled the patent lawsuit RIA initiated in January 2013. ..
Prior to being elected President Scott was selected to be a member of the Restoration Council of the Restoration Industry Association. In 2009 he was selected as the chairman of the council and in 2010 was appointed to Board of Directors. At the 2012 RIA Leadership Summit, he was named First Vice President of the Restoration Industry Association’s Board of Directors. Regency DKI is the proud recipient of The RIA 2012 Phoenix Award, that honored their efforts as part of The Integrated Team, for the Remediation and Restoration of the Detroit Metropolitan Airport Air Traffic Control Tower.
Invitation to Litigation
Scott Stamper, President of the Restoration Industry Association was today’s guest on episode 336 of IAQradio to discuss RIA’s litigation action against ThermaPure and the recent settlement.
ThermaPure holds patents on a process they refer to as “structural pasteurization”; a method that uses heat to rid building materials and personal property of pests and microorganisms.
At the 2012 RIA meeting in Myrtle Beach, SC an impromptu meeting of members was held to discuss ThermaPure litigation against RIA members. Members were distressed over receiving subpoenas which among other things demanded they produce job records for the past seven years. Other members had been sued and were spending hundreds of thousands of dollars defending themselves. Some members who had been sued were forced to declare bankruptcy. In addition to their RIA membership, many of those who were sued were also members of other trade associations none of whom were willing to come to their aid.
- Initially the RIA board of directors was split over the decision of whether or not involving itself into some members’ battle against ThermaPure was prudent. Then RIA President, Sam Bergman appointed a legal committee to investigate options for advocating on behalf of RIA members.
- RIA is a member driven organization.
- Constant calls and ongoing appeals by the RIA members to the board of directors to do something” finally drove RIA to don the gauntlet and begin a legal battle against ThermaPure.
- The Restoration Industry Legal Fund (RILF) was formed to raise money to defend RIA members from the ThermaPure threat and other future threats that may arise. It wasn’t solely the Restoration Industry Association legal fund; it was the Restoration Industry legal fund.
- While it’s RIA wish that their organization had the financial and other necessary resources to defend the entire industry at large, RIA’s primary responsibility is to its members. RIA’s motivation to litigate against ThermaPure was to protect its members.
- RIA’s motives were pure, they sued to revoke the patent not recover money or receive a financial reward.
- RIA hired Foster Pepper, a law firm that had successfully defended RIA members in prior patent litigation with ThermaPure.
- RIA’s attorneys went aggressively on offense with the legal strategy of trying to revoke ThermaPure 812 patent.
- Restoration contractors are at risk because ThermaPure patents are nonspecific when it comes to “raising temperature” or “killing organisms. ThermaPure has prevailed in prior patent litigation and has received licensing and/or settlement fees from other defendants. Out of fear of litigation, contractors who routinely used heaters to thaw pipes and prevent freezing mothballed their equipment.
- The initial budget for taking the lawsuit through trial was $1,200,000. With some month’s legal bills approaching $100,000, the total legal bill from onset to settlement is >$500,000.
- Lawsuits never come with guarantees. A victorious lawsuit is at risk for being reversed on appeal.
- The settlement came about through a mandatory mediation conference, during which Scott met with ThermaPure owner David Hedman. During the conference both litigants had the opportunity to size-up their opposition. During the settlement conference, defenses came down. Scott learned that David Hedman is not a threatening ogre but is a real person who is both technically knowledgeable and passionate about his process. While initially hard feelings existed on both sides of the table, Hedman and Stamper were able to both give and take and strike a mutually agreeable settlement that satisfied both side’s needs.
- ThermaPure opines that their process is special and their patents are financially valuable.
- The free market will prevail, contractors who feel that the ThermaPure license is valuable will buy it and those who do not won’t.
- RIA sought financial and other support for the legal battle. Unfortunately, RIA received no support beyond the various classes of RIA membership.
- According to Stamper, “the restoration industry is used to being pushed around by insurance companies, this is the first time that the industry came together to stand up for themselves’ that this wasn’t right.”
- While not bound to the settlement agreement RIA members would be wise to comply with the agreement.
- Scott opined that those at greatest risk of being sued are non-RIA member firms and those flagrantly infringing on the patent.
- The settlement was a Big Win for RIA. The settlement removes the fear of the overhanging litigation and provides a clear path and parameters within which RIA members can work.
The ThermaPure patent litigation is industry news that I wanted to cover on IAQradio many months ago when it first surfaced, after discussing the matter with an attorney I decided not to over fear of being subpoenaed or sued. Truth be told, I was subpoenaed most likely due to my appearance and comments in an informational video produced by RIA. Neither RIA nor Foster Pepper defended me, I hired my own attorney.
My analysis is that the RIA/ThermaPure litigation settlement is a Big Win for RIA and Big Relief for ThermaPure. RIA members gain the ability to operate within reasonable parameters without fear or litigation. ThermaPure gets relief knowing that a determined foe is no longer trying to revoke their patent, the lifeblood of their business.
As a patent holder I have some experience with patents and no prior experience with patent litigation. I’ve seen some irrelevant and inaccurate comments about the litigation and settlement made on LinkedIn and other web forums. It’s human nature to second guess, naysay, Monday-morning-quarterback and/or ask what if? If you don’t know, weren’t involved and/or didn’t donate to the RILF, perhaps you shouldn’t comment.
Today’s music: “I’ll Sue Ya” by “Weird Al” Yankovic. YouTube
Z-Man signing off