A home energy battle in court: Opower vs Efficiency 2.0

The world of home energy reports for utility customers just got heated. Earlier this month, energy software startup Opower filed a complaint against startup Efficiency 2.0 in United States District Court, District of Massachusetts¬†claiming Efficiency 2.0 infringed on Opower’s copyrighted home energy reports, which help home owners reduce their energy consumption. Efficiency 2.0 denies the claims and issued a counter-claim, saying Opower’s suit is causing damages to Efficiency 2.0’s business.

While Opower and Efficiency 2.0 are direct competitors, the heart of the problem stems from a study Efficiency 2.0 worked on with Stanford Economics Professor Matthew Harding, funded by the Stanford Precourt Institute grant. For the study, Efficiency 2.0 created four types of home energy reports that were mailed to 24,000 customers of utility Western¬†Massachusetts Electric this spring and summer, and one of the reports was made to look like Opower’s report. The purpose of the study was to figure out which type of report was able to get utility customers to reduce their energy consumption the most.

Efficiency 2.0 says it has no intention of using reports similar to Opower’s for commercial purposes outside that research. Efficiency 2.0 also says in its response to Opower’s suit that Harding’s research found home energy reports that look like Opower’s reduce consumer energy consumption less than reports that look like what Efficiency 2.0 has been using. Efficiency 2.0 says in its statement there are also two key differences between Opower and Efficiency 2.0 reports in general: 1) Opower compares consumer’s energy use to their neighbors, while Efficiency 2.0 compares consumer’s current home energy use to past home energy use; 2) Efficiency 2.0 also offers a rewards and loyalty program for consumers who reduce energy consumption and Opower doesn’t do that.

Opower says Efficiency 2.0 is engaging in copyright infringement, and by using reports that look like Opower’s, Efficiency 2.0 is damaging Opower’s business, confusing utility customers by making them think the reports in question are from Opower itself, and breaking copyright law. Opower says it registered its “Home Energy Report” with the copyright office in Sept. 2009.

To put this in perspective, Opower dominates the home energy report business, and Efficiency 2.0 says Opower has 90 percent of this business in the U.S. Opower has 60 utility customers in the U.S. and says it has printed 19 million reports to date nationwide.

Opower is asking the court to have Efficiency 2.0 destroy all the reports in question, sign documents stating it won’t infringe on Opower’s copyright, and give Opower damages for lost profits Efficiency 2.0 gained by the infringement.

Efficiency 2.0 is asking for damages against Opower’s claim, and says the suit has “chilled” its ability to raised funds from venture capitalists, and sign up new utility customers.