Malibu wins patent suit against GSA

[IDBoating]

Like SONIC said earlier, being a publicity held co, Malibu may have had a legal responsibility to shoot first and ask questions later. GSA must be doing something right.

Malibu may soon learn that attempting to enforce invalid claim language is a much bigger public relations problem for them. Fraud on the federal government is not a laughing matter.

[IDBoating]

The problem as you stated boils down to the USPTO being morons and awarding patents without doing research. My company was in a similar fight with a company that was awarded a bogus patent by some lazy idiots at the patent office. It cost us a pretty penny to clear it up.

I would not characterize the Patent Office as morons, not doing research, lazy, etc. I have interacted with the Patent Office and its Examiners and Supervisors for decades, and have yet to personally work with anyone that wasn't intelligent and worked really hard. We've had plenty of differences of opinion along the way - to be expected in an adversarial system - but they've always been honest differences of opinion or different interpretations of fact. That's what the Examination process is for, to sort out those things. The Patent Office does not just randomly issue any old thing you file, the process can be arduous and their people are darned good at what they do.
Personally (and I have no way to know), I suspect the Examiner for SurfGate got wound around his own axle and lost sight of the bigger picture. I've read the prosecution history in great detail and can tell you the exact date when the Examiner made the first mistake: 29 July 2015. The next error occurred on 23 September 2015 when the Examiner suggested and encouraged Malibu to use erroneous language.

One of the most damning details comes straight from Malibu's own words. On 09 December 2015, Malibu basically accepted the Examiner's suggested (and unsupported) language. But they were honest enough to say the following: "Applicant submits that such amendment was not necessary for patentability and is not intended to alter the scope of the subject matter of the pending claims." This is crucial to understand: Up to this point, Malibu had been dealing honestly and fairly, only seeking to claim what they had actually invented. But they were basically forced into invalid language by the Examiner, and finally accepted that language while openly stating THEY (Malibu) did not intend for the changes to expand what they were trying to protect.

This is why I have described the entire matter as a mistake. Malibu didn't originate the error, and I want to (and do) believe they were being honorable in their patent application up to this point. Had they left things alone there, and only enforced what they knew (and admit in plain language) was their invention, the problem would likely have remained hidden and no one would be the wiser. But once they had that language, I suspect some business type(s) got the bright idea that they could use it to whack other manufacturers over the head and (frankly) extort money from them.

I bet Malibu's original patent attorneys are really glad they inserted that language I bolded above. It will help them defend themselves when this all comes unraveled and people start looking for other people to blame. Attorneys have a sworn duty to obey the law and when they crossed the line by accepting language they knew was invalid (see their quote above) the question about fraud on the Patent Office becomes very real. Malibu staff may be able to claim ignorance, but it's an attorney's business to know better.

The data is there in the public record, it's just a bit obtuse to find and understand. Most people (even attorneys) get too focused on the infringement aspect and don't think to dig into the details. But the details are there in black and white, and once they are in front of a judge and jury they will tell a VERY clear and convincing story. Twelve ordinary people will have no problem at all understanding that:

1) They were improperly issued claim language that is not enabled by their specification and illustrations.

2) They then threatened with that improper claim language to take money from people.

3) Those people were not infringing on (symmetrical) "delayed convergence" because that had been described decades previously.

4) Those people were not infringing on "upright water diverters" if they were using traditionally hinged plates at the bottom of the transom.

5) Those people were not infringing on "rapid switching" because there are lots of examples of rapid switching before 2012.

...and so on.

[Bamer]

Guilty! Where do I sign... lol. Kinda feel like I’m on the jury. Very informative and interesting topic!


Sent from my iPhone using Tapatalk

[IDBoating]

And I must keep repeating: I am not a lawyer. These are my opinions. YMMV. Standard disclaimers apply. Etc.

Don't take my word for it. I encourage everyone to download and read these materials for themselves. They are freely available from multiple sources.

Most importantly: SPREAD THE TRUTH. There are a lot of falsehoods out there on this topic. The faster we correct those, the better the entire industry will be. Talk to people. Bring it up in conversation. Help people understand. Be part of the solution.

[talltigeguy]

And I must keep repeating: I am not a lawyer. These are my opinions. YMMV. Standard disclaimers apply. Etc.

Don't take my word for it. I encourage everyone to download and read these materials for themselves. They are freely available from multiple sources.

Most importantly: SPREAD THE TRUTH. There are a lot of falsehoods out there on this topic. The faster we correct those, the better the entire industry will be. Talk to people. Bring it up in conversation. Help people understand. Be part of the solution.

Does our judicial system work by popular opinion? I am not sure how SPREADING THE TRUTH does anything. I was under the impression that the current court cases that were won by Malibu are done and gone. Is there an appeals process that you are anticipating?

I am not necessarily on Malibu's side, I just want to see where you are coming from.

I suspect that one thing that happened is that Malibu thought they had this thing airtight and that nobody could figure out any other way to create the surf wave without list. Suddenly we have multiple variants of the same process going on and they realize that there are other ways to surf a boat without listing it. So they decided to let the courts decide, and it appears the court interprets things in Malibu's favor.

I also have a hard time thinking that this will ever come back to bite Malibu unless the cases get overturned and Malibu has to return the royalties. In that case, they have only lost their time in court and give back the money they gained. I hardly doubt folks will stop buying their boats because they stuck it to Nautique and GSA.

[IDBoating]

I was under the impression that the current court cases that were won by Malibu are done and gone. Is there an appeals process that you are anticipating?

Please go back and read what I wrote. Malibu has not won any court cases. There have been lawsuits, but in every case they have been settled out of court. Settling out of court means the trial process did not complete. No judge or jury has ever ruled on Malibu's SurfGate patents. Critically, this means Malibu has never had to actually defend their patents in court. Malibu has experience rolling other companies for money, but going to court will be an entirely new event for Malibu, one in which they have zero experience.

...it appears the court interprets things in Malibu's favor.

No they do not. "The court" has interpreted nothing. Malibu has basically rolled every other company so far. This is vital for you and everyone else to understand. Malibu has bullied everyone into paying protection money. No court, in any jurisdiction, has "awarded" them anything. They have not "won" any cases.

I also have a hard time thinking that this will ever come back to bite Malibu unless the cases get overturned and Malibu has to return the royalties.

See above. There are no cases to overturn.

The risks of Malibu getting "bitten" are at least as follows:

1) The Patent Office invalidating the SurfGate claims once the error becomes known.

2) The Patent Office pursuing fraud charges against Malibu's attorneys (and possibly, though less likely, the inventors listed on the patents) since they openly admitted against interest that they knew the claims were invalid.

3) Companies presently paying royalties to Malibu stopping those payments.

4) Companies suing Malibu to recover past royalties since they were imposed on fraudulent terms.

5) Malibu having to come clean to their shareholders after bragging their brains out about what are revealed to be fraudulent claims.

To be complete: Malibu could refile for amended claims if the current claims are invalidated. If written properly - back to the way they were originally written - those claims would be viable unless there's some penalty whereby if you defraud the Patent Office you don't get a second bite at the apple. I don't know if that's true but I could imagine there being some sort of punishment. But best case for Malibu, they could go back to the claims they originally pursued and if issued, they'd have protection for their actual invention. Likely they could then pursue vertically hinged water diverters including the aftermarket suction cup devices. But importantly, this would (properly) eliminate risk from those using traditionally mounted trim tabs and their variants. That's actually where things should have been to start, and as far as Malibu should have pursued royalties.

With all due respect, your analysis is based on the inaccurate presumption that there are court decisions in Malibu's favor. There are not. A court is the proper place to examine all of the evidence I've mentioned (plus lots more I haven't). That has not happened yet, and Malibu is coasting... until a court does, actually, truly render a decision. That is a whole new ballgame, one Malibu has never yet faced, and courts don't like bullies - especially bullies whose evidence doesn't support their position.

[sandm]

I don't know that I agree with 'bu having such a foothold on something that SEEMS to be apples and oranges and several have stated the courts have spoken but if I understand it correctly the courts have not decided but rather companies have made a decision, likely financial and better to their bottom line, to pay 'bu for what appears to be a loose patent that likely deserves to be heard in court. even mastercrafts lawsuit was settled by the patent office, not the courts.

in the end 90% of those buying surf boats don't know nor care who invented what or who is paying royalties to who. sure in the automotive environment there are things like this between companies that we never see or hear of as it's not our passion nor what we all follow.

on a related note, do find it interesting that 'bu has not 1 but 7 patents linked to surf technology and wonder how they are all intertwined. that could be what's leading companies to settle vs trying to defend or challenge patent...
https://www.tradeonlytoday.com/indus...rcraft-dispute
"In addition to these two patents, Malibu owns five other relevant patents, as well as several continuation applications directed to varying aspects of its wake-surfing innovations, giving it a total of seven U.S. patents related to wake-surfing systems"

[BrentB]

Okay, this is all very interesting, but who is taking Malibu to court?

ID — clearly you know the answer. Is it privileged information or just speculation on your part?

[D&P Powell]

Just to add some of my personal experience into this discussion... settling out of court does not mean one side or the other "won". It could mean one party involved did a cost based risk analysis and determined the time and money involved in fighting it out in court was not worth it, when a settlement would cost much less. The age old response of "well, they must have known they couldn't win or they would have taken it to court" simply isn't true.

[sandm]

likely skiers choice?? don't see where they have settled so guessing it's churning thru the courts.
https://casetext.com/case/malibu-boa...ers-choice-inc

[IDBoating]

on a related note, do find it interesting that 'bu has not 1 but 7 patents linked to surf technology and wonder how they are all intertwined. that could be what's leading companies to settle vs trying to defend or challenge patent

Yes, they have several continuations off of the original patent. But the core, confusing claim language is common to all. In this case if one domino falls, they all do. Properly written patents do not have to be written that way, but since the language is so questionable Malibu appears to have just copied it down the line.

Okay, this is all very interesting, but who is taking Malibu to court? ID — clearly you know the answer. Is it privileged information or just speculation on your part?

There is much I cannot address on this topic, including that. Sorry. As I've said many times in this thread, these are my personal opinions on topics in the public domain about which I (or anyone) can speak freely. Other things, including intimate details of the Malibu situation... I may not be at liberty to discuss. And I carefully respect confidential information.

Just to add some of my personal experience into this discussion... settling out of court does not mean one side or the other "won". It could mean one party involved did a cost based risk analysis and determined the time and money involved in fighting it out in court was not worth it, when a settlement would cost much less. The age old response of "well, they must have known they couldn't win or they would have taken it to court" simply isn't true.

True, and thank you. Remember, both sides (including Malibu) can save money by settling rather than paying both sets of legal fees. The USA doesn't have "loser pays all" like so many other countries (we'd be much better off if we did, with far fewer frivolous lawsuits). As a result, many settlement decisions are based on "Consent to these royalties now, or we'll charge you these higher ones later if you lose, and we can sustain a much longer legal battle than you can". For a smaller company, it becomes "an offer they can't refuse". If that sounds like extortion practiced by the Mafia, then you're beginning to understand.

[UNSTUCK]

So lets say some boat company fights Malibu in the courts all the way to the end and Malibu wins. What happens to all the surf device patents that have been awarded to other companies? Do they become void? Does this put companies like GSA, Nauticurl, etc. out of business?

[talltigeguy]

IDBoating Thank you for the clarification. I completely mis-spoke about Malibu winning court cases, when they were settled out of court. I would suspect there are pretty smart lawyers on both sides who calculated that it was cheaper to settle. Does anyone know how much the settlement is? It has to be a sweet spot where it isn't worth it for GSA to take it to court, and yet Malibu is happy that they paid their lawyers and punked someone in the face.

[IDBoating]

I doubt GSA is big enough to pay a number that would even be a rounding error on Malibu's balance sheet. At this point I suspect they're going for bragging rights, a clean sweep where they can claim that "everyone" has to license from them.

Their public statements have sort of painted them into a corner in that regard... what do they say when someone not only refuses, but proves they don't have to license in court? All the victims will immediately react. The whole house of cards comes down.

Pride goeth before a fall....

[IDBoating]

So lets say some boat company fights Malibu in the courts all the way to the end and Malibu wins. What happens to all the surf device patents that have been awarded to other companies? Do they become void? Does this put companies like GSA, Nauticurl, etc. out of business?

That's where it gets complicated.

If the Patent Office issues a later patent which appears similar to a previous patent, it means they deemed the later invention to be "patentably distinct". That's the actual term of art indicating that there are sufficient differences that the later one should be considered a new, separate invention.

This is why I believe Malibu does deserve claims on SurfGate (just not the claims they were erroneously issued). Was delayed convergence prior art? Absolutely, in fact the most damning kind - a previously issued patent. Was wakesurfing prior art? Of course. Was switching sides prior art? Sure, there are videos and witnesses everywhere. Was the use of trim tabs to alter the boat's wake a known technique? Yep, boat builders and dealers were selling their wares using that sales line for years before 2012. But what Malibu DID invent, what WAS new, what WAS patentably distinct was the asymmetric use of vertically hinged water diverters (their term, in their patents) to modify the wake. Hinged plates already existed... delayed convergence already existed... switching already existed... surfing itself already existed. Malibu should not be able to claim any of these things. But vertically mounting plates on the side of the transom and using only one a time? To my knowledge that was unique, and thus patentable.

To your specific question: Again, I am not an attorney, but I would think Nauticurl might have a problem with valid Malibu SurfGate patents. It would depend upon how Malibu has to reword their claims to fix the errors. The problem for folks like Nauticurl is that Malibu is aware of them now, so when they reword things they can do so with Nauticurl et.al in mind.

For GSA and anyone else using variations on decades-old horizontally mounted trim tabs... you really need to look at Malibu's patent to understand how specific they are. This will also make you realize why their claim language is invalid. "Enablement" requires the specification and figures to support the claim language. You cannot claim what the spec/figures do not describe. Go read at Malibu's spec and look at their figures and ask yourself if a jury of 12 normal people would have any problem recognizing that traditionally mounted trim tabs are different from "vertically mounted water diverters".