Nautilus and Icon are now expected to go to jury trial later this year in the patent infringement case brought by Nautilus in December 2002 that charges the Crossbow infringes on the Bowflex.
Although a district court last October dismissed the patent case brought by Nautilus against Icon, the Federal Circuit Court of Appeals in Washington, D.C., in February sent the case back to the lower court for further consideration after a December appeal by Nautilus.
In a report issued last week by the U.S. District Court, Western District of Washington, Seattle, it seemed clear that neither party is willing to settle; Icon had rejected the latest offer by Nautilus on Nov. 18, 2003, and has not made a counteroffer. No settlement talks have taken place since then, the document says, and the court is discussing scheduling the trial, which is expected to last about 10 days.
"It's a horse race at this point," Icon legal counsel Brad Bearnson told SNEWSÂ®.
Nautilus CFO Rod Rice told SNEWS a settlement is unlikely.
"We're going to pursue (a trial), and I believe Icon feels the same way," Rice said. "We'll let the courts decide."
Although the Bowflex patent expires next month, both companies believe enough is at stake to pursue the battle. If Nautilus wins, damages would cover the entire period since the Crossbow came on the market in October 2002. If Icon wins, it could aggressively continue to market and promote its product without alteration. Already, Icon has been allowed to market, promote and advertise the Crossbow during the legal battle after a volley of court rulings last year that also found their way to the federal court.
In the patent case, Icon won several key court rulings last fall, including one in October by the district court, which basically found the Icon-made Crossbow was not substantially similar to the Bowflex and therefore did not infringe on the Nautilus patent. That was based on the so-called "doctrine of equivalents" of patent law. This section interprets patents more loosely so products can be compared to see if they are substantially similar, meaning companies can't just move a few parts or change a shape slightly and call something different. Icon had also won findings in May when Nautilus was denied a preliminary injunction for literal infringement, and Icon was granted a partial summary judgment on several claims of literal infringement. That meant those points would not have been allowed in the jury trial that had originally been set for December 2003. In contrast to the doctrine of equivalents, literal infringement means a product is copied nearly exactly.
In the Joint Status Report issued last week, Nautilus alleged that Icon was dragging its feet on a trial schedule -- suggesting dates what would delay the trial to 2005 -- and said that is "another example of its (Icon's) persistent efforts to obstruct and delay this litigation so that it can continue to build market share and rack up profits with its infringing Crossbow exercise machine."
"This thing has so many angles to it. It's complicated," Bearnson said. The Nautilus patent "expires the end of April, and they have some anxiety about that. But this is like a cake; it'll be done when it's done."
Still pending is the trademark infringement allegation by Nautilus that has charged the Icon Crossbow, marketing under the Weider brand name, is too similar in name and promotions to those of the Nautilus Bowflex and thereby confusing to the consumer. Both the patent and trademark charges had been brought in the same suit filed by Nautilus in December 2002, but are being addressed separately. Substantial damage awards are also at stake in this case, and a separate trial is expected some time later this year. Meanwhile, a ruling is still expected on this case as soon as this week by the federal court, subject to a joint motion by Nautilus and Icon for the court to send it back to the district court immediately.
SNEWS View: Got all that? Basically, the legal maneuvers in this infringement lawsuit have been like a hard-driving tennis match with spectators' heads swiveling back and forth as one side volleyed and the other returned. Even when the battle seemed to be over, whichever side seemed to have lost would resurrect itself and the case, taking the legal juggle to yet another level. After the district court dismissed the case last October, both sides filed motions, motions that the court deny motions, and motions for the court to reconsider denying motions (whewâ€¦), which occupied the court in Seattle for another few weeks before Nautilus went to the feds again. Months ago, we said there was no way either party would settle and to look forward to a battle royale in the courtroom. It looks as if that isn't now so far away.