It appears Oban’s case against Nautilus now has no pulse. In a recent opinion in Oban US, LLC v. Nautilus, Inc. and Sports Beat, Inc., Judge Arterton granted Nautilus’ motion to dismiss Oban’s claims against Nautilus for contributory trademark infringement, vicarious copyright infringement, trade dress infringement, and unfair competition under the Lanham Act and “unspecified” state laws. The dispute between the parties concerns heart rate monitors. Oban sells a heart rate monitor under the brand name “60 beat,” for which Oban has a registered trademark. Sports Beat sold its monitors under the brand name “Bowflex” under a license from Nautilus, the owner of the “BowFlex” mark. In its complaint, Oban alleged that Sports Beat sold a heart rate monitor identical to Oban’s, and that Sports Beats’ product manuals make reference to “60 beat” and even refer customers to Oban’s website for support.
To support the claims against Nautilus, Oban alleged “[a]ssuming industry standards for the Nautilus’ licensing agreement with Sports Beat, Nautilus had the right to . . . approve the product that would be using the Bowflex brand,” along with marketing materials, packaging materials, and manuals bearing the Bowflex brand. However, Oban did not allege that Nautilus had any direct involvement in the manufacture or sale of Sports Beat’s monitor.
Addressing the claims individually, the Court found for contributory trademark infringement the “flaw in Plaintiff’s legal theory is that Nautilus’ duty to monitor the use of its own mark does not impose on it a duty to monitor its licensee’s infringement of a third party’s mark.” The Court concluded that “[b]ecause Nautilus’ trademark license for Bowflex to Sports Beat is not alleged to confer control and responsibility for Sports Beat’s manufacture and sale of its heart monitoring product” the complaint did not plausibly allege contributory trademark infringement.
Turning to vicarious copyright infringement, the Court noted that Oban failed to plead that Nautilus had the right and ability to supervise the allegedly infringing conduct and a direct financial interest (citing Softel, Inc. v. Dragon Med. & Scientific Commc’ns, Inc., 118 F.3d 955, 971 (2d Cir. 1997)). In dismissing this claim, the Court found “there is no allegation that [Nautilus] could have prevented Sports Beat from creating a product and associated materials that were an imitation of ‘60beat’ or that without the Bowflex label Sports Beat would not have been able to sell the same monitor.”
With respect to trade dress infringement, the Court, citing Sherwood 48 Associates v. Sony Corp. of Am., 76 F. App’x 389, 391 (2d Cir. 2003), stated “to plead a claim of trade dress infringement involving the appearance of a product, [a plaintiff] must allege that (1) the claimed trade dress is non-functional; (2) the claimed trade dress has secondary meaning; and (3) there is a likelihood of confusion between the plaintiff’s good and the defendant’s.” Considering this standard, the Court concluded that “[e]ven if Oban could establish that Nautilus was indirectly liable for this infringement, it [had] failed to offer any description of the asserted trade dress.” Here, in dismissing this claim, the Court concluded that Oban failed to articulate the elements of its trade dress claim because it did not identify for its monitor “those elements that are common to [the product line] and both distinctive and non- functional.”
Finally, concerning unfair competition under the Lanham Act, the Court found that Oban failed to allege grounds for attributing Sports Beats’ alleged infringing use of Oban’s trademark to Nautilus. Indeed, the Court concluded Oban failed to allege “anything more than Nautilus’ duties and authority as a licensor,” which the Court concluded could not establish liability. The Court dismissed the state unfair competition claims against Nautilus for the same reasons. So, in the end, Nautilus was able to beat Oban’s claims because the trademark license at the heart of Oban’s theories did not involve Nautilus exercising sufficient control over its licensee.