Stan’s Beats Specialized in Court (finally)

Round 1
Stan’s has been going toe to toe with Specialized over their ZTR rim design since 2008. Stan’s cast the first stone by alleging that Specialized’s Control rims infringed on patents they held for the ZTR design. If you are wondering just how silly patent lawsuits in the bike industry are, consider that Specialized hasn’t sold the Roval rims in question since 2009. But the lawyers keep cashing in.

Round 2
Specialized won a round in 2009 when a judge granted a stay so the US Patent dept. could figure this shit out. Stan’s argued this was unfair given Specialized, a much larger company, would gain market share in the meantime. The Judge wasn’t persuaded and the stay was granted.

Round 3
In 2012 Specialized won again – if the stay can be considered a victory. While originally the patent was upheld, upon appeal Specialized successfully argued that a patent filed by Shimano in 2003 and 2006 closely resembled Stan’s patent. If for some reason any of you are sadistic enough to read the 28-page judgement, it can be seen here. So Stan’s got a smackdown. But David wasn’t ready to let Goliath walk away snickering.

 

Round 4
The Board of Patent Appeals noted after their 2012 ruling that it too could be appealed. What do you think Stan’s lawyers decided to do? Stan’s filed a motion to get back into the ring and they won in 2014, and even pocketed 75G to compensate them for legal fees!

Round 5
Specialized appealed again in March 2015 and that appeal was settled in favour of Stan’s and Specialized was prevented from selling anymore 2008 rims in 2016… Wait a second?

This left Stan’s dancing a happy dance, and free to continue making and selling hooked bead rims from 2008 liberated from competition from Specialized, competition that already occurred. And to stop doing something they had already stopped doing. And apparently they got some cash, but they were too polite to say how much.

Here’s what Stan’s had to say about their victory:

BIG FLATS, NY (February 8, 2016) – Stan’s NoTubes, the New York-based manufacturer of innovative rims, wheels and tubeless products, prevailed at the United States Court of Appeals for the Federal Circuit in a hard-fought battle against Specialized Bicycle Components, Inc. (“Specialized”). The Federal Circuit decision upholds a previous ruling by the Patent Trial and Appeal Board (PTAB), which had declared Stan’s NoTubes’ U.S. Patent Number 7,334,846 to be valid.

“We are pleased to have reached a positive conclusion regarding our rim design patent. The court’s decision further strengthens our patent portfolio,” said Stan’s NoTubes co-owners Stan and Cindy Koziatek. “We look forward to continuing the advancement of tubeless wheels for all cycling applications.”

The Federal Circuit heard arguments from Stan’s NoTubes and Specialized on February 2, 2016. At oral argument, the Federal Circuit panel appeared to credit evidence showing the industry’s rapid adoption of Stan’s ZTR™ rims and praise for their patented features and suggested that this objective evidence helps demonstrate that the claims of the ’846 patent are valid. An audio recording of the argument is available at http://oralarguments.cafc.uscourts.gov/default.aspx?fl=2015-1412.mp3. On February 4, 2016, the Federal Circuit affirmed the PTAB’s decision in a Rule 36 summary affirmance.

This matter began in 2008 when Specialized released rims that Stan’s NoTubes alleged to infringe the ’846 patent. Stan’s NoTubes was left with no choice but to protect its proprietary technology by suing to stop Specialized’s alleged infringement in the United States District Court for the Western District of New York. A judgment was entered against Specialized in that case in 2015, with Specialized paying compensation to Stan’s NoTubes.

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Do companies in the bike industry operate like good corporate citizens? Are they at the mercy of lawyers? Why can’t we all just get along?