NOSSK, Inc. v. Fitness Anywhere LLC

Background

NOSSK brought this declaratory-judgment action seeking a declaration that its exercise equipment did not infringe Fitness Anywhere LLC’s U.S. Patent No. 8,083,653 and that the patent was invalid. Fitness Anywhere, which does business as TRX, asserted counterclaims alleging that NOSSK’s Twin Pro, Home, RT-17, and Cyclone products infringed three patents: the ’653 Patent, the ’814 Patent, and the ’764 Patent. TRX also asserted trademark-related claims and claims against NOSSK, Wolfgang Ott, Nadia Ott, and WONODA Inc. concerning assets that TRX alleged had been taken from bankrupt WOSS Enterprises LLC.

TRX previously obtained a $13,002,462.70 judgment against WOSS after a jury found infringement of another patent. In this case, TRX moved for a preliminary injunction—an order issued before final judgment—to stop NOSSK from manufacturing, advertising, making, selling, or distributing the disputed products. TRX also sought orders requiring NOSSK and WONODA to transfer various products, the FlexEx trademark, the website www.flexex.com, and other assets to the WOSS bankruptcy trustee, along with an accounting of sales.

Legal standard

To obtain a preliminary injunction, the moving party must show that it is likely to succeed on the merits, likely to suffer irreparable harm without preliminary relief, that the balance of equities favors an injunction, and that an injunction is in the public interest. Because TRX sought orders requiring NOSSK and others to take affirmative actions before final judgment, the requested relief also included a mandatory preliminary injunction, which the court described as subject to a high standard.

For the patent claims, TRX had to clearly show a likelihood of success concerning patent validity, enforceability, and infringement. If NOSSK raised a substantial question about infringement or validity—meaning a defense that TRX could not show lacked substantial merit—the injunction could not issue.

Patent infringement

For the ’653 Patent and NOSSK’s Home product, TRX argued that the product infringed claim 1. The court found that TRX showed a likelihood of success regarding one disputed “pair of portions” limitation. But NOSSK also argued that the product did not satisfy another limitation concerning how the anchor’s elongated portion and first portion extend across and away from a closed door. TRX did not respond to that argument. The court therefore found a substantial question about infringement and held that TRX had failed to show a likelihood of success on claim 1. It did not reach the parties’ other infringement and validity disputes concerning the ’653 Patent.

For the ’814 Patent, TRX alleged that NOSSK’s RT-17 and Cyclone products infringed claim 6. The court had previously construed “integrally attached” to mean “not removable.” NOSSK presented evidence that the products’ grips could be untied from the rope. The court held that this raised a substantial question about whether the products satisfied the “not removable” and related “integrally attached” requirements. The court found that TRX had failed to show a likelihood of success on infringement of the ’814 Patent and did not need to reach NOSSK’s additional estoppel argument.

For the ’764 design patent, TRX alleged that NOSSK’s Twin Pro product infringed a design involving a flexible strap with a dual stitch pattern. NOSSK presented evidence that the stitching served functional purposes, including holding the anchor tube and related components in place. The court found that TRX had not adequately addressed that evidence and had failed to show that NOSSK’s functionality defense lacked substantial merit. The court therefore found that TRX had failed to show a likelihood of success on infringement of the ’764 Patent and did not reach the parties’ validity arguments.

Alleged conversion of WOSS assets

TRX also sought an injunction based on alleged conversion—the unauthorized exercise of control over another party’s property—of the FlexEx trademark, the FlexEx product, the www.flexex.com website, the Home, Cyclone, and RT-17 products, inventory from two storage lockers, and a sewing machine.

Regarding the FlexEx trademark, product, and website, NOSSK presented evidence that Wolfgang Ott developed the product and coined the “FlexEx” term before WOSS was formed; that WOSS used the mark under a revocable verbal license; that assets related to the product were sold to WONOSS; and that the license was later revoked. The court noted contradictions in NOSSK’s evidence, but found that NOSSK had nevertheless raised substantial questions about whether WOSS owned the mark, product, or website at the relevant times. TRX therefore had not shown a likelihood of success on conversion of those assets.

Regarding the Home, Cyclone, and RT-17 products and related materials, NOSSK presented evidence that the products were different from WOSS products or were developed before WOSS was incorporated, were not transferred to WOSS, and were made with newly purchased parts and materials. The court found a substantial question about whether TRX could prove conversion and declined to enjoin NOSSK from manufacturing, advertising, making, selling, or distributing those products.

The court also considered the WOSS inventory from the storage lockers. Although the evidence suggested possible deceit and showed that WOSS reported $4,450 in inventory while Wolfgang Ott paid $13,500 for the locker contents, NOSSK presented evidence that the contents were acquired through a public auction, that the trustee had access to the lockers, and that auction proceeds were forwarded to the trustee. The court held that TRX had not shown a likelihood of success on conversion of those assets or the other miscellaneous assets at issue.

Ruling

The court concluded that TRX had failed to show a likelihood of success on its claims involving infringement of the ’653, ’814, or ’764 Patents, or conversion of any WOSS assets. Because TRX failed to satisfy the likelihood-of-success requirement, the court did not consider the remaining preliminary-injunction factors. Judge Beth Labson Freeman ordered that TRX’s motion for preliminary injunction be denied.