Nautilus Prevails in $1.8 Million Patent Infringement Appeal

The appellate panel affirmed a Texas district judge's January 2018 decision handing down   a $1.8 million judgment against Icon after finding that the company improperly refused to pay Nautilus royalties under the agreement after all of Nautilus' elliptical patents expired in January 2015 save for its Chinese patent, which expired in January 2016.

Nautilus sued Icon in January 2016, accusing it of breaching their licensing agreement by refusing to pay it a five percent royalty on gross sales for ellipticals that used its patents. Icon filed a counterclaim a month later, and in March 2017, Icon and Nautilus filed dueling summary judgment motions.

In January 2018, U.S. District Judge Royce Lamberth granted Nautilus' motion and denied Icon's, ruling that the maker infringed Nautilus' Chinese patent by including an assembly instruction manual with its ellipticals that used the patent. By including the manual, Icon had effectively manufactured the infringing products, the judge ruled.

Judge Lamberth additionally found that because numerous Chinese courts ruled that exporting a product counts as selling, Icon met another tenet of patent infringement by selling the infringing product.

"We are glad to see that the Fifth Circuit agreed with the district court's ruling," said Pillsbury Intellectual Property partner Conor M. Civins. "Obviously, they made the right decision."

Civins represents Nautilus along with counsel Matt Gates in Austin.