Patent No. 4,620,704 -- better known as the guts behind the Bowflex and its Power Rods -- expires Tuesday, April 27. Generically called a "universal exercising machine" by patent-holder Dosho Shifferaw in his application two decades ago, the "exercising machine" came to be the seed of today's company now called The Nautilus Group.
But the company has in the last couple of years gone through financial ups and downs, management shifts, recalls, and pondered its belly button a bit to redirect and realign its efforts as it continually works to grow. A faster product cycle and diversifying has been and will be key, management says, rather than purely riding on the coat tails of the Bowflex for 20 years or taking several years to introduce a product.
Nevertheless, the Bowflex won't be forgotten. Oh no. It's one of the few names in the exercise equipment world that even most non-exercisers recognize, thanks to nearly legendary TV ads with even more legendary bodies of envy. Plus, the Nautilus company (NYSE: NLS) has been embroiled in a lawsuit over patent infringement since December 2002 with Icon over Icon's Crossbow. Neither company is about to cry "Uncle" any time soon since millions and millions of dollars -- as well as a bit of pride -- are riding on the outcome. The trial is now slated for early 2005, but hearings will continue this fall.
The knockoffs are coming, the knockoffs are coming
The market is already spawning sound-alike, look-alike and claims-alike products, but most will wait until after the expiration to turn on the steam full-tilt. Still, even though the patent expires, the trademark on the name remains for eternity, meaning that names that are too similar (such as current newbies, Powerflex and Bodybow) may find cease-and-desist letters on their doorsteps, if they haven't already. Nautilus can't stop the product at this point, but it will make an effort to stop those trying to confuse the consumers with names, claims and other verbiage.
"Protecting our trademarks is something we take very seriously," Nautilus CEO Gregg Hammann told SNEWSÂ®. "There's all kinds of stuff popping up.
"The thing I worry about is, these bows aren't things to play around with," he said. "I worry a little bit about stuff that's coming outÂ…because I'm afraid they'll end up destroying the category.
"We have to make clear in the customers' minds what's a Bowflex product and what's not."
New products shooting out the door
Compared to product development cycles of yore that took two to four years, Hammann said the company has the cycle down to much less. This applies to all its brands, but may be particularly important in the last few months to the Bowflex as the company tried to position it as best it could before the April 28 post-patent onslaught.
First of all, the company realized it needed to differentiate product between channels based on the type of consumer that goes to each, his or her expectations and age or price needs. Last year, the company began to clear out some Power Pro product through discounter Costco, but the problem came when it was also being sold at other stores. Now, there is a line of products that are designed for specialty stores, sporting goods stores, and for the direct-to-consumer sales. Some products will start in the direct channel so the company can learn about it, upgrade it and tweak it before moving it to another channel.
The Xtreme is now out at specialty, but was only a direct product. The Ultimate is coming soon to specialty. The Sport will go to sporting goods. The Xtreme2 will be out via direct to start and has a "No cable change pulley system," which is Vectra Fitness' patented system that it has licensed to an Asian manufacturer that is making this product, Vectra said. The Xtreme2 may also be diverted to specialty. Differences? Certainly price but also things like numbers of exercises, position of exercising, bench features and footprint.
Inventor Shifferaw not sitting still
Patent-holder and founder of the original Bowflex company, Shifferaw hasn't sat still either. He holds a total of 12 patents and his San Francisco Bay Area offices are a playground of equipment and equipment prototypes. Already to his name are the Ab-Lifter Plus, PowerBoard and Jam Gym, and he promises more this summer in other areas.
Meanwhile, he has told SNEWSÂ® that he wants some recognition by the current company or on its website of his part in the development of the original company, technology and product that germinated today's stable of brands and products now under the company, The Nautilus Group. Shifferaw had incorporated the first Bowflex company in 1985, of which he was president for a short time. While there is no mention of Shifferaw on the current Nautilus website, its latest book, "The Bowflex Body Plan," by Ellington Darden, says he is the inventor and incorporated Bowflex of America in 1985.
"I am happy with the money, and I have bigger fish to fry," Shifferaw said. "But now that everything is over, I want it stated the right way."
The legal beat goes on
Meanwhile, as Nautilus gathers steam in both its retail and commercial arenas with not only the Bowflex, but also its other brands including Nautilus, Schwinn, StairMaster, Trimline and TreadClimber, the legal maneuverings with Icon won't stop.
First up is the patent infringement case in which Nautilus seeks damages, fees and costs. If it wins, damages would get calculated back to the introduction of the Crossbow in October 2002. A federal appeal brought the case back to the district court in Seattle a year after it was originally filed and two months after the district court had dismissed it.
Next up is the trademark infringement case, which although filed together, is being heard separately. Originally barred from using the name Crossbow, Icon appealed and won until the case is heard. That trial should also be held later this year or in early 2005.
"It's about time somebody sent a message to Icon," Hammann said, "and we're going to do it aggressively. Period."
But the consumer won't necessarily know -- or care -- who wins in the court.
"Henry Ford invented a car and everybody else started making cars," Hammann said. "That's OK if you stay in front of your competitors. We have to make sure we're bringing things to the market that are new and innovative."