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Sukumar v. Nautilus, Inc.

United States Court of Appeals, Federal Circuit

May 4, 2015


Page 1397

Appeal from the United States District Court for the Western District of Virginia in No. 7:11-cv-00218-JCT, Senior Judge James C. Turk.

STEFFEN NATHANAEL JOHNSON, Winston & Strawn LLP, Washington, DC, argued for plaintiffs-appellants. Also represented by GEOFFREY P. EATON; MICHAEL A. TOMASULO, Los Angeles, CA.

PATRICK J. KEARNS, Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, San Diego, CA, argued for defendant-appellee. Also represented by ROBERT W. HARRISON.

Before PROST, Chief Judge, NEWMAN and REYNA, Circuit Judges.


Page 1398

Prost, Chief Judge.

Ponani Sukumar and Southern California Stroke Rehabilitation Associates, Inc. (collectively, " Sukumar" ) appeal from the district court's grant of summary judgment for Nautilus, Inc. (" Nautilus" ). The district court held that Sukumar had not suffered " competitive injury" necessary to have standing to assert a false marking claim. See 35 U.S.C. § 292(b). The district court also granted summary judgment on Sukumar's state law unfair competition claims. We affirm.

I. Background

In 1994, Sukumar began caring for his aging father after Sukumar's father became ill and lost much of his mobility. Sukumar assisted his father with his rehabilitation, but, according to Sukumar, he noticed that the rehabilitation fitness machines used by his father did not adequately suit frail seniors. As a result, Sukumar resolved to learn more about rehabilitation for seniors, and he went to trade shows in the late 1990s where he met Nautilus representatives.

Soon afterward, in 1998 and 1999, Sukumar ordered Nautilus machines and asked for certain modifications to cater to elderly users' needs. When Nautilus delivered the custom fitness machines, Sukumar was dissatisfied, and Sukumar filed a breach of contract action against Nautilus and Med-Fit Systems, Inc., the distributor of the products. That case was the first of several legal actions between Sukumar and Nautilus.[1]

In 2004, Sukumar founded Southern California Stroke Rehabilitation Associates (" SCSRA" ), the other plaintiff in this action. Although somewhat unclear, SCSRA's business was likely to include opening and running the senior rehabilitation facilities in which Sukumar was to use modified Nautilus fitness machines. However, SCSRA's operations have been quite limited. SCSRA has acquired over 100 Nautilus fitness machines and, according to Sukumar's deposition testimony, SCSRA has twice attempted to negotiate a patent license from Nautilus. At least one of these license negotiations was proposed by Sukumar in settlement of litigation. Sukumar filed this case on October 21, 2010. As of that date, SCSRA had no business plan, no employees other than Sukumar, no office space, and no prototype designs.

On February 10, 2012, Sukumar moved for partial summary judgment on the issue of whether the Nautilus machines were

Page 1399

falsely marked. The district court granted Sukumar's motion. Specifically, the district court found that eight of the twenty-four patents marked on the 2006 Nitro Plus Biceps Curl, the 2007 Nitro V-Triceps Extension, the 2008 F2 Lat Pulldown, the 2008 Studio Pec Fly, the 2009 One Triceps Press, and the 2009 XPLoad Compound Row did not cover the machines. In addition, eight of the sixteen patents marked on the 2006 Nautilus Commercial Series E916 Elliptical, 2006 Nautilus Commercial Series EV 916 Elliptical, and 2006 StairMaster StepMill 7000PT were found to not cover the machines.

After the district court's partial summary judgment decision, Sukumar became substantially more active. Sukumar retained John Whitman to create a business plan for selling fitness equipment, hired a design firm to create initial renderings of a fitness machine, and consulted with engineers in the industry. At least as of August 2013, Sukumar was in talks to acquire land for offices and a manufacturing facility.

In the meantime, the law concerning who could bring an action for false marking had changed. On September 16, 2011, President Obama signed the America Invents Act (" AIA" ) into law. The AIA amended 35 U.S.C. § 292 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. America Invents Act, Pub. L. No. 112-29, § 16, 125 Stat. 282, 329 (2011). Soon after, this court held in a nonprecedential opinion that this amendment applied retroactively to a suit pending at the time the AIA was enacted. See Rogers v. Tristar Prods., Inc., 559 F.App'x 1042, 1044 (Fed. Cir. 2012).

After a period of discovery to inform issues of standing and causation, the district court allowed a second round of summary judgment motions, and the parties brought cross-motions for summary judgment. On December 6, 2013, the district court granted Nautilus' motion for summary judgment on all claims and denied Sukumar's motion. Sukumar appeals.

II. Discussion

The district court's grant of summary judgment is reviewed de novo. Grober v. Mako Prods., Inc., 686 F.3d 1335, 1344 (Fed. Cir. 2012); Bruckelmyer v. Ground Heaters, Inc., 445 F.3d 1374, 1377 (Fed. Cir. 2006). Summary judgment is appropriate if, viewing the evidence in the light most favorable to the non-moving party, the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, ...

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