Nautilus loses preliminary injunction in Icon lawsuit

Losing the first round court battle in its lawsuit charging Icon with infringement of its Bowflex patents, The Nautilus Group will appeal a court ruling that denied a preliminary injunction it sought against Icon Health & Fitness. The injunction would have halted Icon’s Weider Crossbow sales until a verdict in a trial was reached.

In addition to denying the preliminary injunction, Judge Marsha Pechman of the U.S. District Court, Western District of Washington, Seattle, Wash., granted partial summary judgment to Icon on several claims of literal infringement therefore avoiding trial on those.

Nautilus has said it is appealing the May 16 ruling. To win a preliminary injunction, a plaintiff must show it has a good chance of winning at trial; however, in the ruling, Judge Pechman wrote “the plaintiff has failed to show a likelihood of success on the merits.”

“We believe the judge misinterpreted that and we’re appealing. We believe there are trademark infringements,” Nautilus Group CFO Rod Rice told SNEWS. He said the company is still pursuing the preliminary injunction, while it also prepares for a trial.

In the case filed by Nautilus on Dec. 3, 2002, the Vancouver, Wash.-based, company claimed infringement by Icon of two patents behind the Bowflex machine, and asked the court to hold Icon liable, to enjoin the company from further infringement in the Crossbow or other devices, and to award it damages.

In court documents dated May 12, Icon had asked for attorneys’ fees, damages trebled “based on Nautilus’s violations of antitrust laws,” and a court declaration that the patent is invalid.

“We respect others’ patent rights,” said Scott Watterson, Icon’s chairman and CEO, in a prepared statement. “When we set out to develop the Crossbow, we were careful to create an innovative, distinct product that would not infringe the Bowflex patents. As a consumer-centric company, we strive to develop better products that are more affordable to the consumer, based on our proprietary design. We believe we accomplished that with the Crossbow. We are pleased with the court’s ruling and have always been confident in our position.”

As a part of the ongoing court battle, Icon has asked the court to set a trial date in late March 2004, or one month before the Bowflex’s main patent on the so-called “power rods” expires on April 27, 2004. In turn, Nautilus has asked the court that an earlier trial be set, suggesting Nov. 3, 2003, in an April court document.

“Nautilus would want a trial at a time when a meaningful injunction could be entered — i.e. Nautilus would ask that a trial be set in November so that there would be an injunctive aspect to the remedy if Nautilus were to prevail at trial. Injunctive relief is the most important relief accorded a patentee,” Nautilus wrote in the April 28 court filing.

Rice said that the normal strategy of a plaintiff in a case like this would be to delay a trial, but Nautilus will ask for one to be scheduled as soon as possible. No trial date has been set.

“We will pursue and defend our intellectual property rights,” Rice said. “We will take people on head-to-head.”

The two companies are also engaged in other lawsuits, including one where FreeMotion Fitness, an Icon subsidiary, filed suit in August 2002 against Nautilus in the U.S. District Court, Utah, alleging infringement, among other things, of one of Icon’s patents on FreeMotion’s cable cross technology. That case has not been settled.

SNEWS View: Although losing a preliminary injunction should have no bearing on the outcome of a trial, winning one can give a company huge leverage since that often means the parties will choose to enter settlement negotiations and avoid trial. But without the injunction in place, the playing field is somewhat more level, allowing both parties to charge full bore into court to argue their cases. Of course, you can see why these injunctions aren’t easy to get with a company being forced to show that it basically will win in trial. In the case of the partial summary judgments, the judge in granting Icon this on several claims has made a statement that she believes plaintiff Nautilus cannot win these and tossed them out before a trial. What does this all mean? The two behemoths of fitness equipment will likely square off in court, with all eyes on the outcome. It also means, according to SNEWS legal sources, that there is still a lot to fight about. And we bet this won’t be the last time the two meet in court.