Icon Health & Fitness, Logan, Utah, will be required to pay Octane Fitness, Brooklyn Park, Minnesota, reasonable attorney fees and costs relating to defense in a patent infringement case.
The U.S. District Court for the District of Minnesota issued the ruling July 1 (read in full below), and Octane Fitness has until Wednesday to file documentation of the litigation costs and fees.
Octane contends it has incurred nearly $2 million in costs and fees in connection with the case, according to the ruling, but it has not provided the court evidence to establish the amount of those fees. After documentation including itemized billing statements, expense reports, local billing rates and other reasonable costs are submitted, the District Court will determine the award amount without further oral argument.
Octane Fitness' attorney fees and nontaxable costs were approximately $1.58 million, according to a Jan. 28 renewed motion filed in U.S. District Court.
"After seven years of dedicating resources to what was shown to be a baseless lawsuit, we feel vindicated that the Court has awarded attorneys' fees and costs," Octane Fitness CEO Dennis Lee said in a statement. "Furthermore, we hope that the Court's decision in this case will help limit the burden of meritless litigation against businesses in the U.S."
Icon declined comment on the ruling to Club Industry for this story.
Icon, which manufactures Freemotion, Nordictrack, HealthRider and Proform brands, had sued Octane for infringing on two of its patents on elliptical machines. Icon dropped one infringement claim on electric heart rate monitoring. The U.S. District Court ruled in favor of Octane in 2011 on Icon's infringement claim over a patent covering a machine designed to take up less floor space than prior art models, which also allowed adjustable stride length.
Octane followed by requesting reimbursement for legal fees, but the U.S. District Court and the U.S. Court of Appeals for the Federal Circuit found the case was not "exceptional" enough to award the fees.
In response, Octane filed a petition for certiorari with the U.S. Supreme Court, arguing that this statutory interpretation was a "rigid and virtually insurmountable test," and that trial judges should be able to award fees when a patent holder "unreasonably pursues a case having an objectively low likelihood of success."
The U.S. Supreme Court overturned the Court of Appeals in April 2014. It reduced the standard of proof for legal fee reimbursement from "clear and convincing evidence" to a "preponderance of the evidence." The Supreme Court remanded the case to the Federal Circuit for reconsideration, and the Federal Circuit sent the case to the District Court.
In the ruling issued July 1, the U.S. District Court concluded the manner of Icon's litigation was exceptionally unreasonable and the imposition of fees was appropriate.
The U.S. District Court said: "The preponderance of the evidence shows that Icon spent substantial time and expense searching its patent portfolio for a lawsuit to 'throw' at Octane, and ultimately landed on a 10-year-old patent that was never commercialized and was merely 'sitting on the shelf.' Additionally, Icon employed litigation tactics designed to accelerate Octane's litigation costs in an effort to force Octane to settle rather than defend the suit. Icon's motive and behavior in litigating this lawsuit were 'uncommon,' 'rare,' [and] 'not ordinary.'"