Jury finds in favor of Icon's false advertising claims against Nautilus

After a five-day trial and one day of deliberations, a jury in a case brought three years ago by Icon against Nautilus claiming false advertising and trademark infringement has found in favor of Icon, awarding the company more than $7.8 million in damages.

The trial stemmed from a complaint filed in August 2002 by Logan, Utah-based Icon Health & Fitness against Vancouver, Wash.-based Nautilus Inc. claiming false advertising in a series of claims Nautilus made about its Bowflex product and the product’s rods. In addition, the Icon action claimed trademark infringement of its patented name “Soft Strider” for a cushioned treadmill belt.

The jurors, who deliberated for approximately three hours the evening of Nov. 14 and again much of the day Nov. 15, released its findings late in the day Nov. 15. In them, the jury awarded Icon nearly $7.5 million for damages due to false advertising claims made as a part of Bowflex advertising by Nautilus, as well as nearly $368,000 for Nautilus’ violation of the Soft Strider trademark infringement on a series of Trimline treadmills. The 1,100 Trimline treadmills, built in 2002, no longer carry the Soft Strider wording on the belt.

“It’s a vindication,” Brad Bearnson, Icon’s legal counsel, told SNEWS®. “This has been a 12-year campaign by Nautilus to … the public that the rods are unique to them, which they are not.

“It is a benefit to the industry overall that advertising be fair and truthful,” Bearnson added. “When you have players not playing by the rules, it brings down the entire industry.”

As a part of standard court procedure, both sides will have until Dec. 12 (30 days) to file any post-trial motions or requests for reconsideration of verdict or damages in the U.S. District Court, District of Utah. After the 30-day period and any filings, Judge Tena Campbell will either approve the verdict or could consider making changes to it or the damages assessed by the jury. Depending on the action, Nautilus could decide to appeal the ruling, Nautilus told SNEWS®.

“We do not believe the judgment is fair and reasonable,” a Nautilus spokesman said, “given that no specific evidence was presented showing consumers to have behaved differently because of the phrases in question.”

Icon had called into question the use by Nautilus of assertions, for example, that “Bowflex Power Rods are made of a very special material, poly-hexamethaline-adipamide. It’s a high tech composite material, but you won’t find it anywhere else in the world. It was developed by Bowflex, exclusively for generating resistance to build your body.” According to the claim filed in August 2002, Icon said the material had been used in many industries for years and was not new or special. In addition, Nautilus had claimed the Power Rods were patented, when the now-expired patent (Click here for an April 26, 2004, SNEWS® story on the patent, “That’s a wrap: Bowflex patent expires April 27, 2004”) was on the construction, placement and attachment of the rods in the machine.

The advertising carrying these and other claims called into question by the suit were ceased in 2004.

In an official statement, Nautilus (NYSE:NLS) expressed disappointment over the jury verdict.Â

“We are disappointed with the jury verdict and look forward to the next steps in this process where the court will decide … whether the findings are fair and reasonable,” CEO Gregg Hammann said in a statement. “We intend to vigorously contest this case in the district court and, if necessary, the court of appeals.”

In a separate case, a federal appeal by Nautilus of a ruling in favor of Icon in a patent infringement case filed by Nautilus in the U.S. District Court, Western District of Washington, is still pending. (Click here to see a Sept. 14, 2005, SNEWS® story, “Nautilus appeals Icon non-infringement legal victory to federal court.”) Icon has already filed a so-called “conditional cross appeal” with the U.S. Court of Appeals. That means if Nautilus were to win its pending federal appeal, an appeal of THAT appeal by Icon (are you still with us?) would already be waiting for the federal court. This is the case filed in December 2002 by Nautilus that had charged Icon with infringement of the Bowflex with its Crossbow equipment, which is now called Crossbar after Nautilus won a preliminary injunction in that proceeding.
A second part of the same December 2002 case in the Washington court, but involving trademark infringement of the Bowflex, is now also making its way through the courts, having been on hold while the patent case was heard.

Another trademark infringement case filed in July 2004 by Nautilus against Icon, this time charging infringement by the Crossbar name, is also still pending in the Washington district court.