Nautique to pay royalties to Malibu to settle surfgate suit

From Malibu's 10Q:

On February 6, 2015, the Company and Nautique entered into the Nautique Settlement Agreement to settle a lawsuit filed by the Company in the U.S. District Court for the Eastern District of Tennessee alleging infringement by Nautique of three of the Company's patents. Under the terms of the Nautique Settlement Agreement, Nautique will make a one-time payment of $2.25 million and enter into a license agreement for the payment of future royalties for boats sold by Nautique using the licensed technology. The parties agreed to dismiss all claims in the patent litigation and jointly request the U.S. Patent and Trademark Office to terminate the patent challenge.

Malibu Press Release:

"We are pleased to conclude the litigation between our companies in a manner that respects Malibu's patents," said Jack Springer, CEO of Malibu. "As Malibu continues to innovate and to build its patent portfolio, it is gratifying for us to reach a settlement with Nautique that recognizes the value of our patents and helps us to determine if others are infringing Malibu's IP." - See more at: http://globenewswire.com/news-releas....dYYwuucW.dpuf

Nautique Press Release:


NAUTIQUE AND MALIBU SETTLE PATENT LITIGATION

Posted On: 02/09/15
ORLANDO, FLA (February 9, 2015) – Today Nautique Boats announced a resolution of its patent litigation with Malibu. The resolution includes both parties dropping their claims and counterclaims. The resolution also includes Nautique entering a license agreement related to certain Malibu’s patents.

Nautique’s President and CEO Bill Yeargin stated, “Our team is happy to have this dispute behind us and look forward to building on Nautique’s award winning product and market share increases of the past few years.” “While we felt strongly about our position in this dispute we also know there is risk associated with the judicial process. We are satisfied with the settlement and look forward to growing our industry for everyone’s benefit,” Yeargin added.

http://www.nautique.com/Press/index/...ent-litigation

so who gets sued next. skiers choice, MB, mastercraft.

Originally Posted by jhartt3

so who gets sued next. skiers choice, MB, mastercraft.

Malibu's patent is pretty specific in terms of movement. Only wake systems that extend horizontally from the hull will be protected.

Speculation and common sense indicates that any other surf system would not be protected by Malbu's patent due to prior trim tabs and "Gen 1" surf systems that existed prior to Malibu's surfgate.

That settlement will just raise boat prices more!

I guess Nautique will be giving malibu back some of the money it's recieved over years for Nautiques Tower pattern.

That is exactly what I was thinking Grant!

This sucks....wonder what the repercussions will be with any other surf tab..

Originally Posted by Greeko

This sucks....wonder what the repercussions will be with any other surf tab..

Nautique (and Pavati) is the only system the infringes on the patent.

I doubt that it will directly cause any price increase John. Cost almost never determines price. Correct Craft had already figured out what the maximum price for maximum profit would be based on surveys and marketing data. It's kind of like assuming that because a football team picks up a new high price quarterback, that suddenly ticket prices will rise. To assume that ticket prices aren't already as high as they can be (for now) would suggest that the team owner had somehow allowed ticket prices to stay low out of the goodness of his heart. Cost can certainly determine whether a company stays in business but anybody running a company that is doing his homework will already be charging the maximum that they are allowed by the bulk of their customers. Increased value can increase prices as can the increased wealth of their customer base but this lawsuit hasn't increased the value of these boats in any way. I suspect that the recent spike in boat prices can be directly correlated to the increased wealth of the customer base. This lawsuit can only eat into Correct Craft's profit margin which, I'm sure, has some wiggle room.

wonder how this will effect Wicked Wake?

Interesting settlement, basically Nautique settles out of court to avoid further cost and/or the risk of their strong case from losing in court.

Would be interesting to know if Malibu's $20M payout on the windshield patent had any impact on Nautiques' decision to settle vs.fight in court. Wasn't Malibu liable to the owner of the windshield patent for the sales price of the entire boat? If Nautique would have lost would they have been liable for the entire sale price of the boats with NSS?