Pallet inspection technology may not be everywhere yet. But it will play a major role in the industry in the near future. That’s why a legal dispute between CHEP USA and IVISYS Inc. has profound implications for wood pallets in North America. Anything that could hamper pallet inspection will affect quality control in pallets.
CHEP filed a lawsuit in 2025 alleging that IVISYS violated a number of CHEP patents in its legacy pallet inspection technology. Without going to trial both sides came to a mutually agreed upon settlement where neither party admitted any liability, wrongdoing or improper conduct. According to IVISYS, commercial sales of the disputed technology ceased last year in preparation for the launch of the next generation system.
A source familiar with the patent dispute explained that the old IVISYS system used 3D technology requiring a combination of cameras and lasers that, while still serviceable, has been surpassed by the performance of the next-gen design. IVISYS stated that it has launched a new inspection system using 2D cameras and other proprietary technology.
Stefan Bohman, Group CEO IVISYS Inc., explained, “The 3D technology uses lasers to bounce off a surface —preconfigured setups are available in the market and can be tailored for pallet inspection. The move to 2D cameras technology has given us increased resolution and a different way to capture information on the pallet, while also being faster. It is faster and even more accurate than we are today.”
Bohman added, “Often others try the 3D path because you can buy these readily available setups, but 2D requires a lot of actual in-house AI to process the images and use neural networks to extract the information we’re looking for.”
The new PALLETAI system can achieve speeds up to 800 pallets per hour. Typically, the choke point is the automation around the inspection unit according to Bohman. He added that his company works with a number of different recycling equipment vendors and that IVISYS systems can be retrofitted to work on existing lines.
The lawsuit was brought by CHEP USA last April in the U.S. District Court for the District of Delaware. The case was settled before going to trial. CHEP declined to comment on the lawsuit. The patents involved in this case include U.S. 8918976, 8881360 and 77655668.
Pallet inspection technology is becoming a bigger concern for pallets due to higher levels of automation being deployed in distribution centers, fulfillment centers and other key legs of supply chains. There are a number of pallet inspection technologies on the market. Due to the growing number of patents being filed for pallet-related technology, it is crucial for a patent search to be used while developing new inspection technology. CHEP also has patents on technology to detect ISPM-15 marks as well as protruding nails in blocks. CHEP Technology Pty Limited, a subsidiary of Brambles Limited, holds over 1,000 patents focused on logistics, container locking mechanisms, and automated pallet inspection/repair. To search for patents that may affect your products or processes, visit https://tinyurl.com/knscbc54.
Bohman touched on the core problem with pallets in automated distribution centers. He said, “You build a functionality that requires minute precision, and then you inject an unknown component without verifying it – a typical wood pallet.”
Bohman added, “We’ve heard up to $36,000 an hour in downtime costs. Ten minutes, that’s $4,000 — a lot of money in no time due to a bad pallet.”
Better quality pallets reduce costly breakdowns and broken products causing even more product damage in an automated storage and retrieval system (ASRS). Plus, retailers are having to use slave pallets or even slow down the speed of ASRS due to pallet quality concerns.
Another major driver now and into the future will be data. Pallet inspection can provide data on incoming loads, core supply and operational performance. Bohman suggested that significant data improvements are coming for pallet producers and recyclers. He stated, “I think the data has still not truly reached the pallet space… Data is everything we speak about. If you use it in the right way, there’s so much efficiency to be made within a pallet shop.”
