Supreme Court decision gives Nautilus a boost

Nautilus, Inc., the Vancouver-based manufacturer of fitness equipment, is posting profits, girding to expand and riding a higher stock price. Now, it’s got the U.S. Supreme Court on its side.

The court on Monday handed the company a victory by throwing out an appeals court decision in a patent battle between Nautilus and Biosig Instruments Inc. over heart rate monitors, Reuters reported. It’s a decision that raises the bar on how clearly patents must be written.

Biosig Instruments had accused Nautilus of infringing on its patented technology for heart rate monitors built into fitness machines. The U.S. Court of Appeals for the Federal Circuit had ruled that the patent was valid.

But the Supreme Court’s unanimous decision said the appeals court had set the bar too low in allowing patents to be written vaguely. As Bloomberg.com reported, the justices told the Federal Circuit to reconsider the Biosig patent using a tougher test.

The court issued its decision after hearing oral arguments on April 28.

In a news release Monday, Nautilus leaders hailed the court’s ruling.

“We asked the Supreme Court to accept this case because of our strong belief that the patent system is best served when patent claims are precise, definite, and certain,” Wayne Bolio, senior vice president of law and human resources for the company, said in a news release.

Bolio said the court’s decision not only helps Nautilus but also “numerous other companies facing similar circumstances. We believe this will, in turn, encourage innovation, whereas vaguely written patents encourage patent trolls and unnecessary litigation.”

The decision involving Nautilus “could be used to strike down vaguely worded patents, a problem that many technology companies complain about,” Brad Wright, a patent lawyer with Banner & Witcoff in Washington, D.C., who wasn’t involved in the case, told Bloomberg.com. “It is this vagueness that sometimes gives rise to gray areas in the law, allowing questionable claims to go forward. This might allow courts to rein those in more.”

Momentum grows

Nautilus’ legal victory adds to the company’s momentum. In May, the company reported a first-quarter profit of $5.4 million and said it would add a second U.S. distribution center, and consolidate its research and development facilities into a new building next to its headquarters.

The company’s performance in the January-to-March period shows that strategies “we set in motion three years ago are working well and have put us on a solid trajectory to build an even stronger and more profitable company for the future,” Nautilus’ CEO, Bruce Cazenave, said during the company’s earnings conference call.

The company’s stock, which trades as NLS, closed down 7 cents Monday, at $10.76 per share. The company’s shares have traded between $6.15 and $11.99 in the past 52 weeks.

In another ruling Monday, involving a patent battle between Limelight Networks Inc. and Akamai Technologies Inc., the U.S. Supreme Court unanimously said companies can’t be sued for inducing someone else to violate a patent unless there has been direct infringement of the patent, Bloomberg.com reported.