Icon Health & Fitness has won a stay from a federal appellate court on a preliminary injunction Nautilus had only finalized two days earlier that would have kept Icon from marketing, selling or advertising its Crossbow at least until a December trial.
With legal maneuvers flying so fast, observers were left feeling as if they were watching a bi-coastal tennis game -- don't blink or you'll miss a volley -- Nautilus and Icon now must prepare a response for the Federal Circuit Court of Appeals in Washington, D.C., by Aug. 11. At the same time, both companies will prepare for a trial in the trademark infringement case, now scheduled to begin Dec. 1 in the U.S. District Court, Western District of Washington, in Seattle, Wash.
After the responses are filed, the federal court could either decide the stay is appropriate and leave it in place until the trial in Seattle, it could lift the stay and allow the preliminary injunction, or it could schedule a hearing before it makes a decision, Brad Bearnson, Icon legal counsel, told SNEWS. He said the federal court will look at the possibility of "irreparable harm" to Icon if the injunction were to stay in place.
"We're confident of our position, and we're anxious to get this matter heard before the appellate court," Bearnson added.
Nautilus President Kevin Lamar told SNEWS: "We certainly expected (the stay), and it does not surprise us at all. It is exactly what we would do if the situations were reversed. We still believe we will be very successful with our claims."
The case dates back to November 2002 when The Nautilus Group filed a suit against Icon in which Nautilus charged Icon with trademark infringement and literal patent infringement on its Bowflex machine by Icon's Crossbow by Weider machine, which was introduced in October 2002. In May, Icon won the first round in the legal squirmish when Nautilus was denied a preliminary injunction for literal patent infringement and Judge Marsh Pechman of the Seattle court also granted partial summary judgment to Icon on several claims of literal infringement therefore avoiding trial on those. To win a preliminary injunction, a plaintiff must show it has a good chance of winning at trial.
On July 14, Nautilus won its request for a preliminary injunction on claims of trademark infringement, which was finalized by the court on July 30 after Nautilus filed the required bond. In awarding this injunction, the Court concluded that Nautilus showed "a probability of success (at trial) on the merits and irreparable injury" on its trademark infringement claim. That injunction ordered Icon "and anyone acting in concert with Icon" from selling, promoting, marketing or advertising the Crossbow.
Wrote the court in its July 14 granting of the preliminary injunction: "There is no dispute that the parties effectively market the same product -- a resilient rod home exercise machine." The court also wrote: "The use of convergent marketing channels increases the likelihood of confusion."
"We're anticipating going all the way to the mat," Lamar said. "We do have to defend what we created.
"We know the patent expires in April, but until that date, we'll defend it," Lamar added, noting that if the case were decided in Nautilus' favor, damages would go back to when the Crossbow first was sold.
SNEWS View: In neither the case of Icon nor Nautilus does one expect to see out-of-court settlements since both companies tend to want to stand solid when it comes to their products and their beliefs about them. We expect that this case will indeed go to trial -- and an interesting one it could be.