Round 3 in the Honeywell vs. Nest fisticuffs

The Nest thermostat (in cooling mode).

The bare-knuckle boxing match between thermostat giant Honeywell and smart thermostat startup Nest Labs entered round three on Monday, with Honeywell’s official denial of Nest’s counterclaim. Back in February Honeywell slapped Nest with a patent infringement lawsuit over the smart thermostat technology, and in April Nest finally responded with a counterclaim and at the same time brought on Apple’s former Chief Intellectual Property Officer Richard “Chip” Lutton to head up the fight against Honeywell.

Now Honeywell has issued the third filing, and denies Nest’s accusations that Honeywell is harassing Nest with the IP lawsuit in an attempt to stifle innovation in the marketplace. Nest’s counterclaim sought to stop the initial lawsuit and also sought compensation. The Honeywell statement calls Nest’s counterclaim “self-serving,” “based on unfounded opinions and speculations,” and is “intended to divert attention away from the core issues,” of patent infringement.

Nest makes a connected learning thermostat that can reduce customers’ energy bills and Nest only launched the device late last year. The product was designed and created by Tony Fadell, the former chief architect at Apple, 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.

Looks like this lawsuit will keep rolling until someone blinks, or just gets really tired of it (or if Nest runs out of money). It took Nest a couple months to respond to the initial IP suit, but clearly isn’t going to just roll over under the $ 47 billion-market cap thermostat behemoth Honeywell.

Bringing on Lutton — who was Apple’s Chief Intellectual Property Officer for a decade and left Apple last Summer — will likely lead to an offensive-minded approach to the litigation. Lutton was the man in charge of fulfilling the late Steve Jobs’ vow as told to his biographer, Walter Issacson: “I’m going to destroy Android, because it’s a stolen product.”

Honeywell's reply to Nest's counterclaims

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Video of Fadell at Road:Map 2011:

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