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Wahoo reaches closure in one patent suit; Zwift suit continues

Published May 10, 2023
In Zwift case, Wahoo asks to redact information about trainer market and its financial condition.

ATLANTA (BRAIN) — Wahoo Fitness has reached a settlement with a Nevada inventor who sued the company in 2015 alleging that its Kickr trainer infringed on his patent. The inventor’s suit against Foundation Fitness (the owner of Stages Cycling) also is close to a settlement. 

Meanwhile, Wahoo’s patent infringement suit against Zwift continues, with Wahoo this week filing an amended, redacted complaint. Wahoo also is proposing that the court redact sections of an order that references trade information and information about the company's financial condition.

The Powerbahn cases

In 2015, Powerbahn LLC, owned by inventor Scott Radow, sued Wahoo; Foundation Fitness; Foundation’s founder, Pat Warner; and Giant Bicycle in a Nevada court, alleging that the three infringed on Radow’s patent related to simulating real-world resistance in a stationary trainer by electronically controlling resistance applied to a flywheel.

Powerbahn named Giant because it manufactured the Kickr trainer for Wahoo. Giant was later removed from the case (coincidentally, Giant recently announced plans to acquire a minority stake in Stages for about $20 million). 

The patent infringement case was later moved from Nevada to Georgia’s Northern District Court. Last month, Powerbahn notified the court that it had reached a settlement with Wahoo with each side paying its own legal costs. Powerbahn also told the court it was close to a settlement with Foundation Fitness and Warner. It said both sides had agreed to a settlement but that Foundation now wanted to negotiate about a new model it introduced after the case's discovery period had concluded. Powerbahn told the court it would provide an update on its progress in 30 days. 

Separately, Powerbahn had sued the same defendants in 2019 in Georgia alleging copyright infringements, misappropriation of trade secrets, and similar complaints. The defendants countersued and the case was eventually sent to a special master who recommended a settlement agreement. That case was terminated in April 2021 with each side paying their legal costs.  

The Zwift case

Last October, Wahoo sued Zwift and JetBlack for patent infringement, alleging that Zwift’s new Hub trainer, which JetBlack manufactures, infringed on its patents. Wahoo quickly reached a settlement with JetBlack, with Jet Black agreeing not to sell its version of the Hub, called the Volt, in the U.S. or Europe. JetBlack continues to sell the Volt in its native Australia. 

The case against Zwift continues, however, with the court setting October 20 as the deadline for completion of discovery, and November 30 as the deadline for both sides to disclose their expert witness testimony. The case is scheduled for a five-day jury day trial beginning May 13, 2024.

On April 19, Judge William C. Bryson denied Wahoo’s request for a preliminary injunction that would have forced Zwift to immediately stop selling the Hub. In an opinion, Bryson said Wahoo had made a persuasive argument that the Hub’s continued presence in the market will harm Wahoo, but he said Zwift successfully cast doubt on Wahoo’s ability to uphold its patent’s validity.

“If there were no such question of invalidity, I would be strongly inclined to grant Wahoo’s motion,” Bryson wrote. “However, because Zwift has raised a substantial question of invalidity, Wahoo has failed to satisfy a “necessary prerequisite for entry of a preliminary injunction,” namely, a showing that Wahoo is likely to succeed on the merits.” 

A Zwift spokesman said, “Zwift is pleased with the outcome and remains confident in the strength of its arguments. This was the first step in a lengthy legal process and therefore, Zwift will not be making any further comment on ongoing litigation.

“Zwift’s priority is its customers and therefore remains focused on innovating both its hardware and software platforms, making indoor fitness both more enjoyable and more accessible for all people.”

Wahoo also released a statement on Bryson’s order: 

“Wahoo is confident in the strength of its claims that Zwift’s Hub infringes Wahoo’s patents and that Wahoo will win at trial. This motion was just the first step in what is a lengthy legal process and the questions of infringement and validity will ultimately be decided by a jury.  

Wahoo has spent millions of dollars innovating and developing patented technology for indoor trainers.  It’s important to note that Wahoo does not claim to have sole intellectual property rights on the indoor trainer, rather we have very specific design features that make our product unique which are covered by our patents.  It’s these features that were directly replicated by the Zwift Hub.  For these reasons we feel compelled to defend our IP.  Wahoo  looks forward to presenting clear evidence to the jury that its patents were properly awarded by the U.S. Patent Office and Zwift knowingly infringed those patents.  

While we are disappointed in the ruling, we are pleased the Court agreed that the Zwift Hub likely infringes Wahoo’s patents and that an injunction is in the public interest. The Court’s sole reason for denying Wahoo’s request was it could not go so far as to say that Zwift’s invalidity defense lacked substantial merit.  A Preliminary Injunction, that would have immediately prohibited sales of the Zwift Hub before a full trial is held, is an extraordinary remedy that is only granted in rare circumstances.”

Proposed redactions

On Friday Wahoo proposed redacting parts of Bryson’s April 19 opinion on the grounds that the opinion contains information that would cause it competitive harm if made public. (Bryson filed the opinion under seal and asked both sides to propose redactions if they wanted.)

Wahoo proposes redacting much of a section in the opinion discussing Wahoo’s plans for price reductions of its KICKR and KICKR CORE trainer models.

“Wahoo has a particularized need to limit public access to this information because customers will likely delay purchasing these products if they find out about the sales in advance of the start dates. It would also place Wahoo at a competitive disadvantage if all of its competitors learned of Wahoo’s planned sales and price reductions in advance of the start dates,” the company argued.

“Customers may not purchase Wahoo products if this comment leads them to believe that the company is going out of business …” — Wahoo letter arguing for redaction of a court opinion.

Wahoo also proposes redacting a section referring to the percentage of its sales that are through retailers, versus those sold directly. “This information is not public and could place Wahoo at a competitive disadvantage if all of its competitors learned of Wahoo’s sales channel mix,” the company argued.

Wahoo also proposes redacting part of a section devoted to its corporate financial situation and its ability to raise capital and restructure its debt. Bryson’s opinion noted that Wahoo testified that the Hub’s presence in the market would cause it irreparable damage. 

Wahoo proposed redacting part of a sentence in which Bryson paraphrased testimony by Wahoo CFO Nathan Fenwick. “Mr. Fenwick described Wahoo’s financial situation … (REDACTED),” Bryson’s opinion reads in the redacted version proposed by Wahoo. Wahoo said it has “a particularized need to limit public access to this comment because customers may not purchase Wahoo products if this comment leads them to believe that the company is going out of business and will not be able to provide warranty support.”

Wahoo also wants to redact the dollar amount of a bridge loan that it recently received. Bryson’s opinion refers to Wahoo’s testimony that if it is unable to pay off the loan when it comes due, the company will have to declare bankruptcy, sell the company or hand the company to its lenders. Wahoo proposes redacting the size of the bridge loan, although its existence is public. 

Bryson required both sides to file letters requesting redactions within seven days of his opinion, which was released April 19. He didn’t say when he would decide on accepting the redactions.

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