As you may be aware, earlier this fall Wahoo Fitness decided to sue Zwift over Zwift’s introduction of their $499 Zwift Hub smart trainer into the market. Wahoo argues that the Zwift Hub infringes on a number of patents utilized in Wahoo’s KICKR trainer series. However, Wahoo also concurrently sued JetBlack, who makes said trainer for Zwift, along with selling their own virtually identical units directly to consumers (the JetBlack Volt).
Wahoo initially filed suit against Zwift/JetBlack back on October 3rd, the same date that Zwift started shipping the trainers into the US & European markets (Zwift previously announced the Zwift Hub on September 6th, 2022). Zwift currently doesn’t sell the trainers in any other markets at this time except the US and Europe.
Wahoo alleges that Zwift & JetBlack have infringed upon patents from back in 2014. We’ll ignore the fact that this was the only issue the day Zwift decided to start selling a trainer that undercut Wahoo’s KICKR CORE price by about 50%. We’ll also ignore the fact that most other trainers in the market theoretically infringe upon what Wahoo believes their patent covers. And finally, we’ll ignore that ultimately, having a patent actually doesn’t mean much (as they are often given out like candy) – but successfully defending a patent is what matters. This is true of any patent, from any company.
In any case, since then, the two separate cases have been plodding along through the legal system. However, based on the pure volume of legal transactions filed in the court systems, it was clear that JetBlack was not really the target (even more clear since JetBlack has been selling this trainer for two years now without issue or response from Wahoo).
And indeed, Wahoo has dismissed its case against JetBlack:
It’s not clear what settlement, if any, occurred here. Given JetBlack was never really the target, the ‘settlement’ could range from absolutely nothing other than a pinky promise, to a single flat fee, to a per-unit fee for non-Zwift units, etc… Again, neither side is going to say, but realistically I’d be surprised if there was any meaningful impact to JetBlack here either technically or financially. They were never the target, but merely collateral damage.
Update Dec 6th, 2022 – statement from Wahoo:
“Wahoo and JetBlack have amicably settled the patent lawsuit Wahoo filed against JetBlack. As a result, JetBlack will cease selling its’ Volt Smart Trainer in the United States and Europe – where Wahoo has patents. The other terms of the settlement agreement are confidential. The lawsuit filed against Zwift is a separate case and is still in progress.”
Meanwhile, back on the main event, Wahoo and Zwift have been busy sparing. Though, mostly it’s Wahoo doing the dancing right now. After their initial opening salvo, Team Wahoo then filed more than half a dozen declarations, including from local bike shops saying the Zwift Hub will kill their trainer sales. Other declarations include lots of pretty technical pictures and dramatic statements. A bit later, Team Wahoo asked for some document sections to be redacted publicly (the judge said ‘OK’, taking some of the fun away). Most of these sections are financial related. Oh, they then asked for a temporary injunction against Zwift selling the trainer in the US (the judge doesn’t appear to have granted that). Declarations include from CEO Chip Hawkins, and CFO Nathan Fenwick (who joined in September 2022) – tiny snippets below.
Meanwhile, Team Zwift waited till the buzzer on the first round, and then asked for another month to have more time to prepare (totally normal). The judge granted that. They then let the clock run out again, and filed their opening salvo, which was mostly just a long list of “Nah, we didn’t do that.” There wasn’t too much interesting in their initial documents.
At this point, both sides appear set to have this case draw out for quite a while. The legal teams have put together and agreed upon a schedule for the case, which they’ve submitted to the judge. That schedule stretches out till next spring:
Today (December 1st, 2022), the judge agreed to the proposed schedule and put a hearing date of April 11th, 2023, at 9AM. Of course, that’s just a stake in the ground. The two sides could settle before then, or they could request more time. Or the case could be dropped entirely and just go get ice cream together, Rocky Road I’d presume.
Going forward:
As for where this ends up? Time will tell. However, having reviewed the patents in question, I’m very skeptical that Wahoo’s specific claims and patents will hold here. There’s a lot more prior art than most people realize in the space, and most of it actually predates Wahoo’s trainers. Wahoo unquestionably opened the floodgates to the indoor smart trainer industry, mainly through open software connectivity on their first KICKR. But there were still plenty of trainer companies doing connected trainer things well before Wahoo came along.
I’d also say more generally, with Wahoo’s acquisition of RGT, and The Sufferfest, I’d be concerned with how much they expose themselves to a countersuit from Zwift, around software-focused patents Zwift may have in this arena. Having done a bit of digging on the legal team that Zwift hired, this isn’t their first BBQ. Of course, all this is set against the backdrop of Wahoo apparently having another round of layoffs today.
Ultimately, none of this is good for consumers, and it’s certainly not good for the smart trainer industry. As I’ve heard from a few companies, this is already having a chilling effect on cooperation amongst companies, as well as technical standards agreements (which was already at an all-time low). The indoor cycling industry is already feeling the effects of a bubble-bursting moment, with both Zwift and Wahoo having had rounds of layoffs this year. Zwift is financially in a far better position than Wahoo to weather the current storm, though inversely, Wahoo is more diversified in terms of products. Albeit, the bulk of Wahoo’s revenue is indoor cycling based.
In any case, I’ll keep ya updated if/when more spicy things get published. It’s worth the ten cents per legal page I pay, kinda like morning snacks for sports tech geeks.
With that, thanks for reading!
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Interesting development, although I doubt that the dismissal means JetBlack is done with this matter. As the supplier of the trainer to Zwift and presumably the party responsible for its design and manufacture, I suspect that the contract between the two parties requires JetBlack to defend Zwift in the litigation, and potentially indemnify Zwift if they are found liable to pay damages to Wahoo. That is a very common contractual arrangement in matters such as this. It is possible that pursuing a foreign defendant (JetBlack being headquartered in Australia) was a complication in moving this matter forward in the U.S. court that Wahoo decided wasn’t worth the trouble.
When this suit was first filed, I wondered whether this was just the first of many suits against other trainer manufacturers. It may still be. If Wahoo wins this case and the validity and applicability of their patents is upheld, it makes it far easier to pursue the rest of the industry at a later date (vs filing a bunch of suits simultaneously).
My understanding from various people is that insofar as JetBlack & Wahoo are concerned directly, things are all set there.
How that plays out with respect to Zwift…who knows.
One of Wahoo’s core arguments is specifically how much the price ($499) is hurting them, and specifically because it undercuts Wahoo’s pricing. Some of this is of course establishing that the alleged patent breach is harmful to Wahoo, and thus also grounds for an injunction. But it is notable because much of the stage Wahoo has set this point is focused on Zwift almost exclusively because of the price.
Hilarious how this is hurting Wahoo, yet they had little remorse about reaping the rewards and benefits of hugely increased sales of it’s trainer products during the COVID Pandemic.
Many companies are paying windfall taxes, for the huge rewards they received, Wahoo really seems to want to eat it’s own cake.
> I doubt that the dismissal means JetBlack is done with this matter.
It is done. Normally, when you make an agreement, you also write down that you can’t bring this up in future. No way JetBlack agreed to something that still gives Wahoo the possibility to constantly blackmail them. They would have just fought this out in court.
Without Zwift there is no wahoo. Without wahoo there is no Zwift.
All I know having delt with the customer Service of each I would miss wahoo more.
My biggest concern is if they hurt each other too much it’s like the baker (Zwift) and the grain merchant (wahoo).
You need good quality ingredients otherwise the bread will taste horrible.
But also the best ingredients won’t fix a broken oven.
At the end of the day….. Zwift has the more to loose.
Look at how resilient Concept 2 rowing sales have been WITHOUT a software platform.
I see the hardware will by nature last far longer than the software. Consumers will decide.
Apple attempted the software/hardware monopoly it only works for so long. Hardware wins in the end.
Isn’t this just about trainer sales in the US? I thought Jet Black only sold outside of the US until just after Zwift announced the Zwift Hub? Perhaps the settlement with Jet Black means they are going back to non-US sales?
As a patent and intellectual property holder who has faced the daunting task of trying to defend them in court , I kinda feel for Wahoo here. The patent and copyright systems are not there to protect the free market or consumers. They are there to protect people who “invent” something from having their ideas/designs stolen.
JetBlack has actually sold trainers into the US for quite some time, almost all exclusively on Amazon. I think more recently they do it directly as well.
(I only know this because I had added Amazon links on the JetBlack VOLT trainer way-back-when.)
Patents originally were meant as an incentive to find other/better solutions than the existing patended ones. Not to „protect“ the existing.
So… should I get a wahoo core or swift hub for Christmas?
Saris if you can still snag a good price.
Lawsuit aside, my general gist on Wahoo CORE vs Zwift Hub is relatively simple:
A) Get the Zwift Hub if you have no plans for a KICKR CLIMB and want to save $300+ (since CORE doesn’t include a cassette).
B) Get the KICKR CORE if you have plans to eventually get a KICKR CLIMB, or need multi-channel Bluetooth (for example, if you have a Suunto/Polar watch and want to concurrently connect it to the trainer to capture training load during a Zwift session)
C) Keep in mind there are some very tiny accuracy differences in very specific edge cases where the KICKR CORE does better, but I don’t think they matter to 99% of people out there.
Meanwhile, Saris, with their H3, is a very very solid option that floats in the $600ish range (sometimes with a cassette, sometimes not). However, it’s not as quiet as Wahoo/Zwift/JetBlack (which are essentially silent). And there’s some 12-speed compatibility aspects to consider if you have such a bike.
On the subject of cooperation between all these companies – I was hoping Zwift would enable steering on the neo smart bike once they cancelled their own hardware plans. Anyone have any news or thoughts on this?
Yeah, at this point on that one I’m honestly not clear who’s at fault anymore. Tacx had long said the code was ready, but that was back in the days where Zwift was demanding a licensing fee for it (dumb). I don’t think they’re demanding such a fee anymore, but similarly, I think Zwift also wants companies to standardize on the protocol they and others came up with (logical).
I don’t know where Garmin sits on that, though, I’d argue that Garmin’s first priority is fixing road feel on the Tacx NEO Bike Plus, since Garmin changed to FTMS proper and Zwift doesn’t have road feel baked into that (where they did on the private-ish BLE control they previously used).
Once again, more examples of the standardization of the trainer industry slowly falling apart, even if in this particular instance, it’s because Garmin actually moved to a standard. As I noted in my review though, there was really no good reason to do that with the release of the Bike Plus, since it could have been done down the road when Zwift was ready – just like Wahoo did years ago.
Some perspective from a career patent litigator:
– Delaware is a pretty fair forum. Generally, it favors patent owners, but not to the extent of some other venues, like Waco, Texas.
– Invalidity is REALLY hard to prove, especially to a jury. Wahoo has to prove it by a “clear and convincing evidence” standard, which is quite high. Unless there is something that clearly anticipates the patents (one single publication or product that discloses every single part of every asserted claim, in the same arrangement as claimed) I’d put the odds heavily on Wahoo’s side.
– Both sides have signed up some serious firepower to represent them. I wouldn’t be surprised if the legal spend for each side exceeds $5M when all is said and done.
– Like 99.9% of patent cases, this will settle at some point, almost certainly resulting in higher prices for the Zwift trainer.
Assuming the baseline that Wahoo has to prove the patent s being infringed, then that assumes that all claims for the patent have to be infringed upon by the Zwift hub:
Take for example the ‘222 patent: link to portal.unifiedpatents.com
Within the core claims of this patent, there is one item of note:
“The exercise device of claim 2 further comprising a strain gauge mounted on the member that detects torque imparted on the member when a rider is pedaling in order to generate the torque measurement.”
Except – the Jetblack VOLT/Zwift hub don’t have a strain gauge mounted. They don’t have a strain gauge at all. Originally, the first Wahoo KICKR did, which is likely why they included it in their patent. And then they took it out because they had issues in it. These days, none of their units do.
The next patent, 290: link to patents.justia.com
This requires a strain gauge too, and also doesn’t have one. Similarly, it requires an adjustable trainer frame, which the VOLT/Hub doesn’t have.
The final patent – 542: link to patents.justia.com
This too requires an adjustable frame, which the Volt/Hub doesn’t have, and again, goes even deeper on the strain gauge requirement.
—
In this particular case, the VOLT/Hub doesn’t meet the threshold of showing each and every one of the specified claims. Now, one could try and argue that not using a strain gauge is required, but Wahoo’s challenge there is that it’s a massive part of some of these patents (even if they don’t use it today). One could remove that particular claim element, and try and argue math is a similar function, but that opens up a whole different can of worms for Wahoo.
Hi Ray, thanks for the thoughtful reply! Your assumption is wrong — Wahoo does not have to prove every asserted claim is infringed; infringement of any one claim is sufficient for Wahoo to obtain judgment in its favor.
Wahoo attached to their complaint a detailed claim chart, that I pulled up; it is Exhibit 5, if you can find it. In it, they only allege infringement of claim 1 of the ‘222 patent. I won’t comment on if their allegations are reasonable or not, but it’s important to remember that infringement is determined entirely separate and apart from invalidity/prior art. Wahoo will have to convince a jury that, for each element of claim 1, it is more likely than not that the Zwift Hub meets that limitation.
Invalidity is a somewhat similar analysis — the jury will be asked if Zwift has proven by clear and convincing evidence (>75%) that each element of an asserted claim is present in a prior art reference. If Zwift can prove that all of the elements of the invention are present in a single reference, in the same arrangement, the claim will be invalid for anticipation. If those elements are across multiple references, the Zwift has to prove both their presence, and the motivation for a person of ordinary skill in the art to combine the teachings of those references to arrive at the predictable result, in which case the claim will be invalid for obviousness.
Having multiple claims in a patent is impactful in two ways, first, it provides more distance from the prior art by including additional elements that may not be found in those references, at the cost of narrowing the claim. Second, it may provide a greater possibility for obtaining damages or an injunction.
But at the end of the day, Wahoo needs only to prove infringement of one claim of one patent, and it will be entitled to at least money damages in the form of a reasonable royalty, and may be entitled to recover its lost profits and/or an injunction barring Zwift from making, using, selling, offering for sale, or importing its device in the United States.
Let’s start by saying that I am in the IP law field. I’d offer that patents are not handed out like “candy.” At least in the US where it is a complete patent system vs. other countries where it is a registration system. A US patent gives someone the legal right to sue others for protecting their IP. Patent examiners do extensive research to determine whether the invention put in front of them in the application is new and novel, and has not already been put out by another inventor. It is a laborious job that requires a great deal of education and experience, while under intense deadlines placed upon them by the Fed. Sometimes things aren’t perfect, but that happens in any field. FWIW, in a registration system, an examiner does a quick review of the formalities of the application and then issues a registration to the inventor. There is no search or deep hunt for similar items in the public. It is up to the rest of the world to prove the new invention is not new. The US system is much more robust. So, anyway, a little side info for the discussion.
As the inventor on 12 US patents, I’m going with DCRainmaker on this. Those patents were obtained/owned by companies I worked for, and in all but two I’d say they weren’t worthy of receiving a patent in terms of novelty or advancing the art. Of course it was never up to me. It was up to the companies’ patent attorneys and the patent office. And I’ve been party to many more patent applications/issuances, in addition to going up against and having to design around, license or contest similar flimsy patents of our competitors.
Sorry I have to disagree. The US patent system is an international joke with apparently zero due diligence being done with respect to prior art. From my perspective the system is designed to protect lawyers and their bank accounts and no longer has anything useful to add to the world of invention and innovation. Quite the opposite, the US patent system is the main thing holding back innovation globally.
Unless you’ve got first-hand experience working in the USPTO system I’d have to disagree with you. Yours is the argument that’s been circulating for some time.
Sounds like you have more direct knowledge of what has been taking place with those particular patents and all the related outside litigations. I can’t speak to that. I was merely speaking to the comment by Ray that had the implication that the work done by the USPTO is not well done or that the employees care.
Keep wanting to comment, have any true patent/IP attorneys reviewed the 3 specific patents in question here?
As “Joe Blow” not a patent attorney, reading through them, they seem like some of the broadest “we’ve patented all software controlled, EM resistant bike trainers, by describing “a bike trainer” in specific terms exactly like you’d describe any bike trainer pretty much, without describing anything unique to Wahoo’s invention.
In other words, they’ve described in essence what ALL smart-controlled bike trainers are with nothing unique, except POTENTIALLY 3 or so minor areas I saw that MIGHT be defensible (weakly, but okay)… only because of their usage in a bike trainer specifically, but not at all as unique to the industry in question or technology at large:
1. Reversible hub adapters – I’m pretty sure (the lawyers will sort that out I’m sure) these already exist, I know even my 15+ year old Hope Bulb hubs have drop-in adapters that, given the frame changes since those days, someone (if not Hope, someone along the way) have figured out how to make reversible, thus prior art, if not actually patented)… so only if Wahoo are first to use this in an actual “trainer” is this at all defensible I imagine (but since the prior art if it exists (if I were submitting it) would be something like “reversible adapters allowing multiple frame configurations to be used with a convertible hub design” (in some more technical depth), if such exists, it would mean Wahoo is potentially infringing, but again, the application specifically to a bicycle TRAINER, and not an actual bicycle wheel, could get them that one (and easily bypassed by selling the competitive trainer with single-sided trainer adapters which already exist of course)
2. Method of attaching the strain gauges to the inside of the chassis – again I cannot believe at all that this concept isn’t prior art in significant usage (in particular for things like sports training facilities, university and medical research, etc)… this is likely about as “public domain” as it comes, as it’s literally the most logical usage of a train gauge to measure force in such a system. But again, I’m not a lawyer.
3. Using 6 magnets for EM control of the flywheel – this is described in some detail… if this is the infringement (hard to tell actually what is being infringed, the legal filing is broad and vague on this point, again, basically the lawsuit and patents are effectively describing a computer/software controlled, EM resistance based, bicycle trainer, with reversible hub adapters.) This is obviously easily avoided by using say, 8 magnets instead of 6… so if someone (Zwift/Jet Black) want to skirt this infringement, they simply use 8 (or some other number). Except that…
Again, the patent has lots of verbiage around “someone skilled the knowledge of this technology” being able to extend/interpret the patent to cover similar designs… but in which case, the entire concept of THEIR patent is prior art/technology (restricting rotating objects via EM, such as controlling wind generator rotational speeds, other industrial “wheel” speed controllers (anywhere friction braking would not be ideal), and a bazillion other such concepts, regenerative braking, etc).
Obviously the computer-controlled part predates Wahoo’s product/patent, as gym trainers have done that for years, and again, all this exists in research usage for decades, nothing new here…
So again, my armchair take on it, is Wahoo is suing from someone taking all the prior art, that’s all been used in someone’s bicycle trainers (commercial or in research areas) in some fashion for years, and saying “if you sell all that, you are infringing on our patent that covers all these things that have predated our thing”…
That’s where the lawyers and patent law in general come in, I don’t know where that line gets drawn/crossed. To my mind, their patent is either unsupportable (because it is 100% drawn upon prior art and other existing patents, their own verbiage indicates to the effect that “someone with sufficient knowledge can extend the concepts logically beyond the “ends of” their patent specificity” in technical areas… the reverse thus is also true… someone could extend all the prior art, and patents, to then indicate the Wahoo trainer is, in fact, infringing on all other patents for similar designs before it… thus (to my mind) is indefensible.
Ultimately a lot of lawyers are going to get rich, and the cost of the combined average of these 2 company’s trainers are probably going to go up when all is said and done, hurting their combined customer bases).
I wouldn’t be surprised if one or more of the Wahoo patents actually get thrown out (they should to my mind, they are terribly broad and non-specific at least from a layman perspective). They may have made it through the “tight budget and deadlines” (giving benefit of the doubts on why) patent offices, but now they’ll have skilled attorneys with deep pockets and time to spend the client’s money, digging through prior art and patents in much more depth….
It’s like someone trying to patent a car design, that added a bluetooth-compatible stereo for the first time…. you can’t (well I suppose you could try…) patent the total car “as a car/system in totality” because of something like that, but that’s what Wahoo appear to be doing here “we’ve designed a trainer with all these features, that already existed in other trainers, with maybe one new combination (my car example – didn’t invent bluetooth, didn’t invent a car stereo, didn’t invent a car stereo that HAS bluetooth, and didn’t invent… a car, or a car with a stereo, but are patenting a car with a car stereo that incorporates bluetooth, in essence), and now you can’t do that same, logically obvious, already done in different ways, extension/combination of prior art).
Hopefully the IP/patent law folks here will actually review in-depth the patents at the heart of this, if they have nothing better to do (LOL, yeah right)… and can weigh in more specifically than with just generalizations, on the actual merit, and/or defensibility, of those patents. They look way overly broad and generic to my eyes, but… they did receive patents for SOME reason, just not at all obvious why, to me.
The whole world has to watch that mess every day with patent trolls and unjustified patents stifling real innovation out of fear of litigation in the US. It’s not a rumour, it’s current events. One only has to take a browse of Apple patents to see how broken the system is, not a single one of them is genuine innovation and every single one has obvious and massive prior art. But they pay their fee and get their patent, and then win in court not because the patent should be valid, but because they have deeper pockets than their victims.
Hi all, sorry for going on a tangent, but I don’t often get a chance to stumble upon a group of IP/Patent experts who are also interested in sports.
I’ve been wondering for quite some time now how brands other than Nike started selling carbon plated shoes, because my understanding was that they patented it. And case in point, the first competitor to offer an alternative was Adidas with their rods (as such not a plate). So how do the other brands get around that, or do they all pay royalties?
“I was merely speaking to the comment by Ray that had the implication that the work done by the USPTO is not well done or that the employees care.”
I don’t think I’m saying employees are doing bad things, or bad work, or that they don’t care. But rather, it’s a near-impossible system.
(Random sidenote: When living in DC, I lived on the same street as US PTO’s sprawling Alexandria campus.)
The unfortunate reality is that examiners simply have too many cases and not enough depth on a given topic to be able to have the historic knowledge on some of these areas. One can look at the patent examiner’s other cases on each of these specific patents to see how many are vaguely sports tech, but in quite significantly different areas.
It’s part of the core issue with the US patent system. Companies file all sorts of silly patents for things that aren’t really new, but have just enough different words in a patent to imply they are new. Or, the awarding of patents for obvious iterations.
Don’t get me wrong, there are certainly new inventions out there. Things nobody has ever seen before. But that’s not what often happens in these disputes, it’s often about patents being awarded that simply shouldn’t have been awarded.
This is nonsense. Patent examiners are extremely hardworking, well-educated people. In the case of the patents here, they were rejected multiple times during prosecution, and Wahoo had to amend its claims over and over to finally arrive at something that had an element that wasn’t anticipated or obvious.
If you want to compare to the European system, the major difference is the “inventive step” doctrine, which largely incorporates the American “obviousness” determination. The functional difference between the two systems is nil.
For better or worse, obviousness isn’t just a “well, it feels obvious to me” standard; there are rules so that patent applicants, their competitors, and the public can reasonably understand what is patentable and what isn’t. In the case of these patents, while it may feel obvious in hindsight, Wahoo successfully demonstrated to the satisfaction of the examiner that the prior art did not actually teach its invention.
I think this is getting a little too personal. It is just a friendly discussion. The final decision is outside of our involvement/scope. It is not about who is in the right or wrong.
> I’d offer that patents are not handed out like “candy.”
Ah yes, must be a different USA than the one where you could patent rounded corners.
All this on the same day that Wahoo does another round of layoffs.
So does this mean I should wait and see if smart trainer prices crash?
I wouldn’t be surprised if this actually happens (price drops) AFTER the dust settles… although Zwift may be selling at a slight loss or break-even today (sustainable by other income such as subscriptions, at least for awhile) it won’t be much of a loss (can’t cut their own throats)… which means it’s reasonable to assume Kickr is making hundreds of dollars of revenue above their production costs (and likely recovering R&D and all other expenses in very short terms at this point, thus after a few months of sales I’d guess, it’s all profit beyond regular production/tooling/distribution costs).
That day for a correction though may be 3 years from now… but (ignoring inflation adjustments), a settling MSRP of similar design/quality products in the $700 range seems potentially very likely to me (ironically, also what the Kickr Core is selling for today “on sale” at many vendors, thus supporting that it’s a highly marked up product to begin with…)
I’d sure like to see wahoo focus on making RGT better, and making products that don’t break, instead of burning cash on legal fees to attack windmills. They’re not acting like a company I want to buy from either with a bunch of dumb arguments about why they don’t like a product that is good for consumers.
Hey wahoo – I did NOT buy speedplay powermeter pedals last week because of the quality issues noted at cycling tips and your lackluster response to that. Quality needs to be a higher priority before I buy another wahoo product.
I was writing a reply about how your comment about “prior art” doesn’t seem to apply in the US as the threshold for novelty seems extremely low compared to Europe.
But when I looked up 11090542 at the EPO to see if there were any objections etc I noticed it’s ownership has been transferred to Royal Bank of Canada as a security in 2021.
Maybe Wahoo doesn’t really care but they have to do this to appease the banks?
This is extremely common in all industries. You see it even in Fortune 50 tech and pharma. IP portfolios are extremely valuable collateral for lines of credit. The bank’s security interest doesn’t transfer ownership or impede a patent owner’s right to enforce those patents.
I was employed at a tiny (20-person) aircraft instruments company that was sued by Boeing for infringing 6 of its patents. Boeing expected us to fold and beg for forgiveness, but our CEO and founder had substantial wealth from the sale of his prior company, and instead chose to put everything on the line to fight the Boeing suit, starting with hiring the best intellectual property law firm on the planet (literally the best).
Boeing was totally unprepared for such a vigorous response, and they made many stumbles and fumbles on the path to court. In particular, by being caught flat-footed they gave us the time to do an exhaustive and painstaking discovery process, literally taking Boeing apart on every facet of their suit. Of course, Boeing tried to do the same to us, but our legal team prevented it becoming a “fishing expedition”, basically keeping Boeing at bay.
Once the trial itself started, our team attacked each of the 6 patents. One by one, each were invalidated, sometimes on multiple grounds (for most, they got the Patent Office to admit to making mistakes in the approval process). Boeing didn’t really understand what was happening, especially when the FAA started providing testimony on our behalf! When 5 patents had been overturned, Boeing amended their suit to take the 6th patent off the table. With literally no legs to stand on, Boeing lost the suit and received several stiff penalties, largely due to our team asking the Court to view the Boeing suit as a SLAPP (Strategic Lawsuit Against Public Participation), filed only for intimidation with no legal basis or foundation from the start.
The aviation press had written us off long before, causing our business to experience a massive downturn as customers feared we’d not be around to support our products. We added these damages for the Court to consider. Boeing lost badly. Very badly. They tried to use the appeals process to reduce and/or slow payment of their penalties, but we also fought the appeals, and wound up INCREASING the settlement amount, largely due to the SLAPP aspect.
Our triumphant win didn’t result in the immediate return of our business. That took time. But even without customer sales, the years over which Boeing paid us penalties were some of the most profitable the company had ever recorded. The owner directed much of that money into R&D into a new generation of instruments, and also into filing more of our own patents, mainly as defense against future suits of this kind.
We didn’t even have to pay our enormously expensive legal team: Boeing was forced to cover their entire bill, which was over $10 million!
Done right, not only could Wahoo take a severe beating, Zwift could clear not only its own path, but also open paths for others in the industry.
As for Wahoo’s tactic to pursue Zwift alone, patent claims are primarily based on the final sale, not the manufacture of a product. Going after the primary and largest retailer makes the most sense. Winning there would make the manufacturer a simple clean-up suit. Fighting the most winnable battle first is sound strategy. Plus, focusing on Zwift will make it easier to call the JetBlack folks as witnesses, which is much easier to do when they aren’t defendants!
Maybe an attempt to try to force Zwift’s hand into buying Wahoo off or out completely.
The Computrainer on the NES is way older than 20 years, the length of a patent.
I wonder if Technogym might revisit their insane pricing if this bubble does pop. If they do, I’d love one of their trainers…unless Peloton appears in NZ first.
I find the involvement/non-involvement of JetBlack in all of this interesting. Price-wise they have now matched the Hub price of £449 in the UK … in fact I bought one in October when the Hub went out of stock immediately after it was launched, and it has been a brilliant buy so far, so they are now undercutting the Core at the same level.
Given that Zwift is essentially using their tech, how is that Wahoo can focus the lawsuit on them and not on JetBlack who, presumably, are the ones guilty of any patent infingement?
Update and statement from Wahoo regarding the JetBlack settlement last week:
“Wahoo and JetBlack have amicably settled the patent lawsuit Wahoo filed against JetBlack. As a result, JetBlack will cease selling its’ Volt Smart Trainer in the United States and Europe – where Wahoo has patents. The other terms of the settlement agreement are confidential. The lawsuit filed against Zwift is a separate case and is still in progress.”
So let me ask, if I buy a Zwift trainer and Wahoo wins the legal battle, is there any risk my trainer becomes obsolete at some point? Is there any type of risk of buying a Zwift trainer at this point?
I don’t see any real risk there, for two different reasons:
1) First, the design of these trainers (including the Zwift Hub) doesn’t require any internet access. They talk over standard ANT+ & Bluetooth Smart trainer/power meter protocols. Thus, even if both Zwift & JetBlack were to disappear tomorrow, it wouldn’t matter, your trainer will keep on connecting to all the apps out there – just like trainers from half a decade ago (where those companies have bowed out, but the trainers still work). The singular ‘risk’ is that you wouldn’t receive future firmware updates, though frankly, almost no consumers bother to update their trainer firmware anyways it seems, so…yeah.
2) The second piece would be that your trainer is identified by the ANT+ manuf ID, which would technically ‘tell’ an app that it’s a Zwift Hub. So in an absolute worst-case scenario where Wahoo tries to force apps to not permit connectivity to apps based on it being from X company. But there’s approximately zero % change of that happening. First, all these companies would tell Wahoo to take a flying leap. And even if Zwift couldn’t tell Wahoo that, then you’d be covered by Zwift having to take back the trainer under various warranty actions. At that all ignores the massive blowback that would occur should any company try that. I’d be so bad I think it’d single-handedy put Wahoo out to business. I can’t even begin to imagine how ugly the headlines would be.
So in short, no, there’s no meaningful risk here.
I love that DCRM gets into the comments and keeps discussions flowing. Most comment sections are where people come to write snark, but I always view this comments section as basically a second piece of content on a topic.
So, Wahoo releases the Core in 2018 undercutting much of the direct drive trainer business at $899, Wahoo acquires Sufferfest in 2019, Jetblack releases Volt in July 2021 at $499, Wahoo acquires RGT in April 2022 and quickly implements pricing including the cost of trainer to undercut Zwift, after years of discussing it Zwift releases Hub in September of 2022 which is a copy of the Volt that undercuts the Wahoo Core by $400 with the same specs (and arguably similar technology), and then after a couple rounds of layoffs Wahoo files suit against Jetblack and Zwift but then lets Jetblack out as the beef “they started” is with Zwift. Wahoo may have poked a hornet’s nest taking on someone 40 times their size in value. I suspect things are about to get alot worse for Wahoo and other trainer companies just as it is for bike companies. Not sure Wahoo’s timing is going to help them out much.
link to bikeradar.com
Nice lead in (out?) to Rocky Road. Very punny!
Wahoo should never have acquired RGT and just entered into a JV with Zwift. They would have crushed the indoor training market. Instead… once again… everyone tries to do everything rather than sticking to what they’re good at and now we have Garmin-like firmware updates from Wahoo (i.e. ones that break key features on a regular basis) and Zwift wasting money on their on-again off-again hardware forays rather than expanding virtual world. SMDH.
I’m not sure this is something Zwift would do (I’m sure Wahoo would love it though). There are too many good options for trainers out there. Zwift singling out Wahoo trainers as the only option (or giving them a competitive/technical advantage) would not be customer friendly.
Quick comment about patents. Precisely *because* winning a patent lawsuit can bring significant money to a company, employers often offer juicy bonuses to employees who get patents published, prompting many to become a patent-producing machine. The easiest path to get a patent is to slightly modify a previous one that you own and justify its existence as a novel idea, so those who nail the formula and gain the inertia have a lucrative yet perverse incentive to keep going.
So, while most patents might not mean much as academic achievements, the business opportunity they present has so much potential that it makes patents quite meaningful to a lot for companies, even if the layperson only hears about them when reading the news.