Ponanai Sukumar, et al. v. Nautilus, Inc.


Docket No. 2014-1205

PROST, NEWMAN, REYNA
May 4, 2015

Brief Summary: The FC held that under under 35 § USC 292(b) (false marking) a potential competitor may suffer a competitive injury if it has attempted the market” as evidenced by “(1) intent to enter the market with a reasonable possibility of success, and (2) an action to enter the market”. Sukumar was found not have presented evidence of market entry as of the date the complaint was filed.

Summary: Sukumar appealed from DC grant of SJ for Nautilus “that Sukumar had not suffered a ‘competitive injury’ necessary to have standing to assert a false marking claim” under 35 § USC 292(b). The DC found that 1/3-1/2 of the patents marked on the Nautilus equipment did not cover that equipment and therefore granted Sukumar’s partial SJ motion. Prior to that decision, Sukumar “had no business plan, no employees other than Sukumar, no office space, and no prototype designs”. After the decision, “Sukumar became substantially more active” by retaining a business-planning consultant, hiring a design firm, and beginning talks to acquire land and a manufacturing facility. Also after the decision, the AIA changed the law “to eliminate qui tam false marking suits and require that an entity suffer a ‘competitive injury’ to bring a private right of action to enforce the false marking statute” and the FC held in a nonprecedential opinion that the change “applied retroactively to a suit pending at the time the AIA was enacted” (Rogers, FC 2012). Since “Sukumar was not selling products in competition with Nautilus at the time this suite was filed”, the question here is “whether (or to what extent) an entity that has not entered the relevant market can suffer ‘competitive injury’”. The FC held “that a potential competitor may suffer a competitive injury if it has attempted the market” as evidenced by “(1) intent to enter the market with a reasonable possibility of success, and (2) an action to enter the market” (“Dreaming of an idea but never attempting to put it into practice is insufficient.”) And where “a falsely marked product is also property marked with other patents…a potential competitor must show that the falsely marked patents deterred market entry, but that-for some reason-the properly marked patents did not deter market entry.” Here, the FC agreed with the DC “that Sukumar’s evidence of his intent to compete with Nautilus is weak” and “Sukumar has not taken sufficient action to enter the market for fitness machines” at the time the suit was filed. As such, it found the grant of SJ to Nautilus was properly granted. The DC also granted SJ that Sukumar’s state law unfair competition claims were not supported by sufficient evidence, and the FC also found this grant to be proper.

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