Nextec Announces Marmot Has Settled Patent Infringement

Nextec sent out a press release dated Oct. 31 announcing that Marmot
Mountain Ltd. had settled a patent infringement case brought against
the company by Nextec in May of this year. In this release, we finally
learned that the fabric Nextec claimed was in violation was Marmot’s
WrapSure silicon-encapsulated fabric — a fabric used in products
Marmot stopped selling a year ago.

The lawsuit — click here to our May story on the suit — had alleged that Marmot infringed on two of Nextec’s patents for fabric encapsulation technology.

But there are two sides to every story: Nextec officials announced they
were pleased Marmot had acknowledged it had “unknowingly infringed” on
Nextec’s patents, thereby recognizing Nextec’s patents validity. But
Marmot’s CEO Steve Crisafulli sees things slightly differently,
especially the part in the release where Nextec touted that Marmot had
paid it an “undisclosed financial sum” in damages.

“The amount we paid Nextec was next to nothing and is, in short, our
solution to stop the hemorrhaging of legal fees,” says Crisafulli. “We
had two lawyers and a CFO in the San Diego court and after taking one
look at the case, the judge said to us, ‘I don’t know why you are in
this, but you had better get out as quickly as possible.’

“It is still our belief that the Nextec’s patent will eventually be
overturned as we believe there is sufficient prior art to make the
patent invalid,” says Crisafulli. “We simply weren’t willing to pay the
legal fees to defend something that is no longer in our catalog.”

When we mentioned to Crisafulli that Nextec’s release stated Marmot
agreed that all future purchases of encapsulated fabrics protected by
Nextec’s patent would be exclusively from Nextec, Crisafulli responded,
“Why on earth would we carry something that has already proved itself
to be a failure in our product line?”

SNEWS® View:
For the record, we think Nextec product is very good and have, on
several occasions, donned an L.L. Bean shirt made with the fabric
because it works so well — makes gravy stains easy to wipe off. GoLite
stuff sacks made with the silicon-impregnated fabric are also our
favorites, even with the astronomical price tag. That said, this is a
case that, in our opinion, was filed for maximum press attention, and
we don’t have a lot of respect for that approach. The fact that Nextec
never once warned Marmot when the company was supposedly infringing in
1999 and 2000, and waited until May of this year to file a suit — then
blanket the media with press releases — is somewhat curious. The fact
the press releases hit the wire long before anyone at Marmot was aware
there was anything amiss is more curious still. We’re glad the lawyers
are no longer receiving industry money. Ultimately, what Nextec
managers just did is shoot themselves in the foot with a key outdoor
brand that might have been a very strong ally had the entire matter
been handled differently — especially in light of Marmot’s new influx
of cash from the Russell deal.