The early to mid-1990s was a very difficult time for the industry due to patent litigation initially brought against The Lockformer Company, which at the time was a division of Met-Coil. In March 1991, Lockformer was found guilty of “willful” infringement, throwing the industry into uncertain waters. Eventually, every CAD/CAM company that marketed hardware and software to the HVAC industry and every contractor who had purchased some would be ensnared – none were excluded – eventually eliciting SMACNA’s assistance, to no avail.
But there were positive things too. In 1995 SMACNA released their Duct Construction Standards (DCS) that for the first time recognized both TDC and TDF as new rectangular construction methods. They tested and rated them giving both a new designation: T-25/A (TDC) and T-25/B (TDF) respectively bringing an end to the industry’s engineering community’s confusion over usage.
Next up, the development of truly labor-saving technology for inserting corners into both TDC and TDF ductwork. But let’s start with the “biggie,” the plasma cutting table and CAD patent litigation.
Now, you might wonder how a guy starting out at GRIPNAIL in the ‘70s and then with Ductmate in the ‘80s – about as far away as one could get from computerized anything – could end up being involved in a patent lawsuit over software. As I've mentioned, during my half-century in this industry, some places I ended up were deliberate decisions and some were just being with the right company at the right time, or the right company at the wrong time. Estimation was the latter. Although I was on the periphery, I had a ring-side seat, but I’m getting ahead of myself here, so stay tuned.
As the ‘80s closed, computerization took hold in the MEP/HVAC industry. CAM cutting tables were already an established “must” buy for basically any contractor cutting sheet metal. Add to that the ability to estimate jobs cutting the old manual “take-off” from days and weeks to hours. Labor and material costs were part of the software along with new take-off devices such as Estimation’s “probe” and Quickpen’s “digitizer pen” and take-off board.
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At the 1987 New York ASHRAE Show, opportunities arose for me to take over sales at Engel, but the new world of computers excited me, both estimating and the hot new product, CAD – “The next big thing." As you probably know by now, I like challenges and new stuff. In the spring I interviewed with Joe Massaro, the software developer for the Linde L-Tech plasma tables, for a sales position with his new East Coast Sheet Metal CAD division and at Quickpen, the hot new computer estimation company based in Denver.
I thought Joe’s CAD was a somewhat risky bet. I knew Joe whose Uncle owned Elmsford Sheet Metal where Joe was a partner. His East Coast Sheet Metal company developed the software and Elmsford was a union sheet metal fabrication company that Joe grew into a large area competitor. Incidentally, he has just written a book: “The Impossible Road” by Joe Massaro, available on Amazon. It’s a good read and explains much about the difficulties he faced in the patent suits. I turned down Joe’s offer. Little did I realize until later when I would be competing against his East Coast CAD software licensed to Quickpen, that it was a better product. In my opinion, Joe Massaro is one of the industries’ under recognized luminaries.
Next up, Quickpen. While I had basically agreed to become a rep, I got a call from Pete Arndt, national sales manager for Lockformer to call George Llewellyn, President of Estimation; that he wanted to meet me. Now, I’m not proud of what I did next, but I respected Pete and had always had excellent relations with Lockformer. While Quickpen was new and Lockformer was one of the premier HVAC brands in the US and world-wide – still today, I took Pete’s suggestion seriously and met George.
George was a consummate salesman and gentleman. He convinced me to join Estimation and so I started the next chapter in my HVAC career – computers – leaving Quickpen behind. But the kicker was to give me CAD should Estimation ever develop or gain access to a HVAC CAD program. On July 12, 1987, my 44th birthday, I started as one of Estimation’s newest reps. It was perhaps the best five years of my career until it ended…getting caught up in guess what? Levine’s CTI (Construction Technology, Inc.) CAM and CAD software patent suit.
Estimation marketed to the MEP trades starting out first on the electrical side, their forte, but partnered with Mechanical Data (a 1/3rd owner of Estimation) who wrote the software for Lockformer’s Vulcan plasma table. Without elaborating here, I’m sure you know where this is going, but it’s complicated with tentacles eventually reaching deep into the entire industry.
For the first two years I was a straight commissioned rep selling hardware, software and peripherals to mechanical, electrical and plumbing contractors and loved it. It was one of the few times in this industry I love that I had no management responsibilities – the other was my brief tenure as Ductmate’s SoCal rep. I learned fast and made good money.
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In 1989 George bought the rights to Lockformer’s CAD product line, developed by Mechanical Data and Orange Systems, a CAD software developer, also a 1/3rd owner of Estimation. I was appointed National Sales Manager, given the moniker, “CADMAN. Yes, original. By this time, most of the Industry knew of “some sort of lawsuit” against Lockformer, but most in the trade discounted it and continued on with their respective businesses.
After Lockformer lost the suit in 1991, the HVAC world, as we knew, would never be the same. It disrupted the industry by delaying future CAD development that to some degree still lingers today. It put many companies into bankruptcy and forced others to consolidate. Vicon Machinery today is a direct result of Avalon Machinery, owner of the original Vicon plasma machine that Levine ended up owning due to his patent suit.
Included in Lockformer’s settlement was a $10,000 fee for every table sold and a license from CTI to sell future plasma tables with a $10,000 fee per table to CTI. For the contractors of all other manufacturers who were not indemnified as final litigation proceeded, they were put on notice for using an “unlicensed” product and subject to the same infringement. Eventually, CTI sent a letter to every non identified contractor (he had the list from his court proceedings) demanding either $10,000 or $15,000 based on time paid. So, let’s stop here to understand how this happened. One word: nesting.
As I mentioned in the ‘80s article the cutting software grew out of early labeling programs that companies such as Mechanical Data, East Coast Sheet Metal and Shop Data Systems wrote. They subsequently tied up with machine manufacturers such as Lockformer (Vulcan), Linde (L-Tech) and MG (Silver Eagle) tables. What Levine did was head to the US Patent Office.
Since I know a little about patents, even though a similar process was used or is being used for a similar application in a different industry, what was unique to CTI was that no one, I repeat, no one ever used software to nest sheet metal fittings on a table. And since no one had done this before, even though Levine had been unsuccessful with his earlier attempts with a laser based cutting system, it did not prevent him from being first to be granted what became impenetrable patents, or in patent terminology, “pioneering patents.” I’ll explain this term in more detail in the second ‘90s section.
During the years of litigation and those leading up to it, many asked how a company could infringe a patent where similar products such as cutting steel plate and cloth patterns had been used for years. Using cam software to cut anything on a flat surface such as a 4’ x 8’ table, requires nesting of the parts to achieve maximum material usage; for if not, the material waste would negate any savings achieved. That no one had ever developed software for this process in the sheet metal industry, was the catch. Additionally, downloading a CAD file based on cam software fell under Levine’s patents. Therefore, any software that maximized material use for cutting sheet metal fittings – nesting – was covered by Levine’s patents.
As CADMAN I was close to the litigation due to Estimation’s CAD software being a former Lockformer product. I knew all the players involved and had worked closely with them: Lockformer and their dealers, Mechanical Data and Orange Systems. It was Mechanical Data’s CAM software married to Orange System’s CAD software married to Estimation‘s marketing with yours truly heading sales. Estimation was owned by George Lewellyn, Mechanical Data and Orange Systems.
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Another year went by before Met-Coil, Lockformer’s parent, settle. It took that long due to, and I would conjecture, how to raise the money, because of the huge monetary judgement: $15,000,000 million. I say huge, for a company doing around $18 million in annual sales. From what I heard at the time, the court found Lockformer’s execs in contempt due to the delay and almost got them thrown in jail. An interesting side note: Lockformer had shipped their new 2900 Vulcan plasma table to Anaheim, California for the January 1992 ASHRAE Show. It sat on the loading dock until the day before the show opened pending settlement. It got displayed.
As mentioned above, part of that $15,000,000 was a $10,000 payment to CTI for every table sold during the infringement period and taking a license to pay CTI $10,000 for every new table sold, putting a Lockformer table ten thousand dollars higher than all the other manufacturers. So, what happened to all the others?
CTI took an ad in the March 1992 issue of SNIPS listing the following companies that CTI had filed patent infringement suits:
- Cybermation, Inc. (Cyb)
- Cybermation, the first to develop a HVAC cutting table, fought CTI all the way to the PTO appeal Tribunal losing in 1997. They just shut the doors and threw away the key
- Cybermation Cutting Systems, Inc.
- ESAB Welding Products (L-Tech)
- East Coast Sheet Metal Fab. (Joe Massaro’s East Coast S/M software)
- M. G. Industries (Silver Eagle)
- Shop Data Systems (M. G.’s software supplier)
- Quickpen International
- Vicon, Inc.
- K. N. Aronson
- Advance Machinery
- IntelliCad Computers
Vicon, a small Pennsylvania manufacturer owned by Avalon Machinery, with little other HVAC machinery presence, advertised in SNIPS for a year after Lockformer’s loss that they thought they were not infringing, and asked CTI and the court for “clarification.” The clarification shut the doors. In addition to Lockformer, defendants Mechanical Data, Orange Systems and Estimation were found guilty. Estimation shut down their CAD division and I was laid off – June 1992.
Now that’s quite a list. One by one, they either settled and took a CTI license or paid up and got out of the business, save Cybermation. As part of the court proceedings, CTI had a list of all plasma machines sold leaving those contractors who had purchased Cyb machines on their own. After Cyb folded, Levine sent a “demand” letter to each for $10,000, the fee that Lockformer paid which became the basis for all settlements.
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While I never read the letter, I knew it stated that if the contractor didn’t pay within a certain time, the fee would double. When discussing this with Tim Walsh, President of Vicon, he confirmed, but corrected me. The delay fee was $15,000. So, what does a contractor do who is oblivious to this lawsuit when he receives Levine’s letter? Well, most just think a scam and toss in the waste basket. But when the second demand comes, he or she calls his business attorney (most sheet metal contractors don’t usually have a patent attorney on staff). The business attorney tells him to call a patent firm. The patent attorney, after running up billable hours reviewing the case, tells the contractor to “write a $10,000 check before it becomes $15K” as I’m sure some of you reading this did.
Vicon is yet another story and one of the most interesting as a result of Levine’s judgement. Tim Walsh’s rep company, Walsh-Atkinson based in New York, was a distributor of Avalon Machinery’s Vicon plasma machine, Engel and Duro-Dyne among other products. After Vicon closed their doors, Plasma Automation was founded. Tim needed to service machines. He called Levine stating that he needed parts for his customers. The Chickenhawk – the industry’s moniker – asked “Why not buy the business” and that’s just what he did. Plasma Automation purchased the assets of Avalon from CTI, which led to the founding of Vicon Machinery, LLC and the rest is history.
In addition to the mess with CAM, industry development of CAD was disrupted and delayed going forward. Estimation was out of the business, eventually being sold again and again; now what remains is part of Trimble. As I understand, IntelliCad ended up being owned by CTI, but while a small player then, never gained market acceptance and disappeared. Quickpen is another story and thanks to Joe Massaro I was able to piece together.
In the early ‘90s East Coast licensed their CAD software to Quickpen, but by decade’s end the relationship soured, and East Coast went to market direct; later partnering with Autodesk that became AutoCAD/MEP. However, this relationship would end too; yet a final partnership would develop with Trimble using East Coast CAD/CAM software.