As the two behemoth fitness companies Nautilus and Icon spend millions of dollars a year on several patent and trademark infringement legal battles, Nautilus seems to have gained an upper hand in one suit it brought against Icon in December 2002, even though Nautilus lost its bid to have the court charge Icon with contempt.
In another case, brought by Icon against Nautilus in August 2002 and pending in the Utah courts, a jury trial slated to begin March 14 has been postponed more than five months. Â
These cases are being waged over the Nautilus' Bowflex product and Icon's product that was called the Crossbow (now CrossBar due to a ruling in a court preliminary injunction last year) with each company charging the other with one or more types of infringement of intellectual property. In the cases, both companies have won big and lost big in the last two-and-a-half years, with Nautilus seemingly winning a few more punches as the cases progressed.
Nautilus wins most claims in Markman hearing
In the latest round in the U.S. District Court, Western District of Washington, a ruling in a so-called "Markman hearing" held in September 2004 came down, with the judge leaning predominately toward Nautilus' claims in these preliminary arguments.
"We believe the Markman ruling strengthens our position on the protection of our intellectual property, and we intend to proceed to trial on this matter," Nautilus general counsel Wayne Bolio told SNEWÂ®.
Icon was unavailable for comment by our deadline.
Although rulings in a Markman hearing are in no way binding or indicative of how a jury may decide in a jury trial, the outcome is considered key. In a Markman hearing, both sides present their evidence before the trial judge prior to the jury trial -- much like a short preliminary version of a trial. The judge then issues opinions about merits of the claims. The theory is, according to some legal experts, the outcome can increase the likelihood of a pre-trial settlement and therefore avoid a time-consuming and even more costly jury trial.
In addition, after a Markman hearing, the successful party may file a motion for summary judgment on patent infringement or validity, which is often granted by the court. As one judge has said about Markman hearings: "To decide what the claims mean is nearly always to decide the case."
Nevertheless, in Icon's Jan. 13, 2005, quarterly earnings call, legal counsel Brad Bearnson said no settlement talks were scheduled at that time and he didn't expect any to occur.
Request to charge Icon with contempt denied
In one blow to Nautilus, Judge Ricardo Martinez, of the Washington court, on March 7 denied Nautilus' bid to have Icon charged with contempt for continuing to sell equipment branded Crossbow after a June 2004 court preliminary injunction finally barred it after a year of rulings and appeals. (See SNEWSÂ® story, Dec. 28, 2004, "Nautilus says Icon in contempt of court for continued Crossbow sales.")
"The court finds that defendant (Icon) substantially complied with the Court's preliminary injunction," Martinez wrote in his ruling. "Moreover, upon learning of the sales at some NordicTrack stores, defendant again ordered NordicTrack to cease all sales and pull the machines from its sales floors, and defendant has assured that NordicTrack immediately complied with those orders."
Nautilus' Bolio said the matter nevertheless remained a serious one.
"We wanted to bring to the attention of the court that Icon was not in compliance with the order," Bolio said. "Icon conceded that the product in question was being sold in its own stores after the injunction was issued. We consider lapses in compliance to be a serious matter that should not be ignored."
Other suits: Washington and Utah
But the name change from Crossbow to CrossBar wasn't enough for Nautilus: Nautilus launched in July 2004 in the Washington court its second suit against Icon (actually, its third if you consider the original suit's patent and trademark charges were split into two cases), charging Icon with trademark infringement over the new CrossBar name.
At that time, Colleen Logan, Icon's vice president of marketing, responded in a statement, "We do not believe this lawsuit has merit, and we intend to vigorously oppose it. We do not believe the names Bowflex and CrossBar are 'confusingly similar,' as Nautilus contends in its suit."
In November 2004, Judge Martinez, also hearing this case, set a jury trial to begin Jan. 23, 2006, with settlement conferences and mediation to be held in August and September 2005.
In the Utah case that was brought by Icon and running simultaneously in the U.S. District Court, Utah, a jury trial slated to begin March 14 was delayed to August 22, presumably due to other criminal matters to come before U.S. District Judge Tena Campbell. That case relates to Icon's then-named PowerFlex made for Gold's Gym.