In a jury verdict that awarded $2.5 million in damages to the plaintiff, Cybex International has lost a patent infringement suit that began nearly three years ago over its "Stableflex" treadmill deck system.
Medway, Mass.-based, Cybex said in a statement it plans to appeal the verdict in the case brought by Gary Colassi and tried at the U.S. District Court, District of Massachusetts, in Boston. The appeal process could take another two years or more.
"We believe we have very good grounds for the appeal," Cybex CFO Art Hicks said in the only additional comment by the company, "and we disagree with the verdict."
The eight-member jury, which took six days to come to its decision, noted in its verdict on special questions that all 11 of the Cybex treadmills listed did indeed infringe on Colassi's patent for a "treadmill support deck system" that was granted to him in September 2000 after he filed for the patent in January 1996.
Damages were awarded based on a "reasonable royalty" on the treadmills sold since the patent filing, stated the jury verdict. Â
"I am pleased the truth came out," Colassi told SNEWSÂ®. "I'm just the little guy."
According to Colassi, who has owned and managed a World Gym in Foxboro, Mass., for 16 years, he showed the system to Cybex after having filed for the patent but before being granted it. After the company allegedly reviewed the concept and product for several months, it declined to license it, Colassi said.
"They said they would be going in another direction," he said. "I was really disappointed. The industry called for it. It was what people wanted."
About four years later, he said he became aware of what seemed like an infringement and proceeded to challenge the Cybex product in court. He added that the appeal doesn't bother him.
A Cybex product manager to whom we were referred for questions about the treadmill did not return a voicemail or email request for information or product clarification. In a written statement, Cybex said it was "disappointed in this verdict which it believes is unsupported both by the record and by sound engineering principles." Cybex said in a statement it is implementing a redesigned deck system and does not expect the court decision to have "a significant impact on sales of its treadmill products."
Cybex (NYSE: CYB) reported it anticipated recording a third quarter 2005 pre-tax charge of approximately $3.5 million including costs and legal fees. In addition, the company said it has sufficient liquidity to satisfy the award if its appeal is ultimately unsuccessful. Although stock prices initially dropped slightly in response (to 3.49, volume 40,400, from the previous day's close of 3.76 on a volume of 2,500), they immediately recovered, closing Aug. 31 at 3.75 with a volume of 353,200.