In what can be called nothing but a huge victory for Vectra Fitness in its patent infringement battle against behemoth Icon Health & Fitness, a settlement signed in the 11th-hour by both parties Sept. 9 has stayed a trial that was scheduled to begin Sept. 15.
"We settled the dispute to our satisfaction, and the settlement agreement has been signed," Vectra legal counsel Jose Sanchez told SNEWS. Judge Marsha Pechman of the U.S. District Court, Western District of Washington, in Seattle, signed an order Sept. 11 dismissing all claims and closing the case.
Already, plaintiff Vectra on Aug. 27 had won an order from the court granting it summary judgment that meant the court had awarded Vectra victory without trial on certain issues (in this case, a defense by Icon claiming the patent and its subsequent review were invalid). At the same time, the court denied Icon's plea for a final judgment and a stay pending appeal, as well as a request for a summary judgment of lost profits, leaving that figure open to a jury to decide during a trial. Those denials pertained to claims by Icon that too much time (six years) had gone by before Vectra took action against alleged infringement and that the lapse of time invalidated the claims.
These rulings by the court came after an earlier loss to Icon in February that granted plaintiff Vectra partial summary judgment on the issue of literal infringement, which meant those claims could also not be presented in a trial. The case was originally filed against both Icon and Sears on March 19, 2002.
With a jury trial and a possible permanent injunction staring Icon in the face and enough to indicate at this point the case was now about how much a jury would say it owed Vectra, the two parties began discussing the details of a settlement on Sept. 5.
Although both parties have signed the agreement, Sanchez said, it will take about 30 days for the final paperwork to be signed and for the judge to officially terminate the now-stayed litigation, which although dismissed can be reopened within 30 days if a settlement falls through. Details of the settlement are confidential. A spokesman for Icon didn't return phone calls requesting comment by deadline.
"The parties have agreed the patent is valid, enforceable and infringed," Sanchez said the agreement states. An exhibit during the trial listed 50 different Icon-manufactured strength-training machines that allegedly infringed on Vectra's patented cabling system, including the Weider Pro 9940 and 9930, as well as other Weider Pro items and other products sold under the Icon brand names NordicTrack, Image, Healthrider, Proform and Weider.
Icon will continue to sell, manufacture and even create products that infringe on the patent under the license agreement of the settlement, Sanchez said.
"It's always better to settle a case so you can craft your own solution," he added. "This was a long way coming."
The original patent was issued in 1989. A re-examination of the patent was partly triggered by a now-settled 1996 lawsuit against TNWK (Pacific Fitness) Corp. The U.S. Patent & Trademark Office re-affirmed the validity of the Vectra patent in the fall of 1998, and that case was settled in 2001. The patent is for the company's "On-line No Cable Change System" introduced in 1987, when the patent application was filed.
Vectra, based in Kent, Wash., now has about 11 licensing agreements with various companies, Sanchez said, some of which may not actually be manufacturing a product currently that mandates a license, and some have negotiated an agreement but maintain they are not infringing.
SNEWS View: It takes a lot for Icon to back off and settle, so Vectra must be slapping high-fives over this victory. Although details of the settlement weren't disclosed, insiders said it was really really really big -- so big that national magazines that write about the largest settlements in these cases would have picked up this one â€¦ if it weren't confidential. How many zeros are involved? Quite a string, we are sure, since this means that Icon (and Sears) can continue to sell a laundry list of products that obviously make them both a lot of money, and the company now doesn't have to spend time and money to redesign any.