A jury verdict has been rendered in the patent infringement suit filed by Gary Colassi against Cybex Intl, ruling that Cybex's Stableflex deck system, utilized in its treadmills, infringes a patent held by Collasi. The jury awarded $2.5 million in damages to Colassi.
According to published reports, Colassi tried to sell his design to Cybex in 1995, but was turned down. Two years later, Cybex released its Stableflex line of treadmills, which Colassi claimed copied his design. Colassi did not obtain his patent until 2000. Cybex sold roughly $80 million in Stableflex Treadmills between 1997 and 2000 and another $84 million after 2000. The award represents the patent licensing fees that Colassi would have earned. Cybex plans to appeal the verdict, claiming it has “strong grounds.”
Cybex anticipates recording a Q3 pre-tax charge of approximately $3.5 million including costs and legal fees with respect to the Colassi litigation. While Cybex intends to pursue relief from the verdict, it has sufficient liquidity to satisfy the award if its appeal is unsuccessful. Cybex is also implementing a redesigned deck system and does not expect the court decision to have a significant impact on sales of its treadmill products.
