Apple and Nike Face Patent Lawsuit From Exercise Tracking Inventor

By Kerrie Spencer, staff writer – December 13, 2011

Apple and Nike having anything in common seems like a stretch of the imagination. However, it is not as Nike has decided to jump into the iPod market with their Nike + iPod, likely in the hopes that it could become a significant item for users. Questions of patent infringement might be on the top of legal minds, but in this case it does not pit the two companies against each other.

Currently Apple and Nike are named defendants in a lawsuit that indicates they licensed invalid patents for their exercise tracking equipment. How one licenses an invalid patent is interesting, since that would either need to be done deliberately or inadvertently as the result of a mistake. However, ignorance of the law is no excuse.

Erik Cherdak is at the center of the court case not only as an inventor, but as a registered patent lawyer. The patents in question in this case (Erik B. Cherdak v. Curtis A. Vock and PhatRat Technology LLC, and Nike Inc, and Apple Inc.) relate to his inventions. [1] This could make for a very volatile case, and it would not be the first of its kind launched by Cherdak either. [2] He has sued Nordstrom, Walmart, Kmart and Payless Shoes in the past.

In this patent infringement case, Cherdak seeks declaratory relief. He also alleges a violation of Section 2 of the Sherman Antitrust Act, as permitted by Section 4 of the Clayton Act and in accordance with Walker Process Equipment, Inc. v. Food Machinery and Chemical Corp., 382 U.S. 172 (1965). [3] In other words, he seeks to bring out the big historical cases to make a point that patent infringement is not to be tolerated. Who better to fight a case like this, than an inventor with patents in his name, who also happens to be a registered patent attorney?

Cherdak holds two patents relating to the invention of timing/tracking devices in athletic shoes, 269 Patent and 445 Patent. One patent was duly registered and issued in 1994, the other in 1995. There is evidently no question Cherdak is the acknowledged inventor and patent holder. [4]

Based on that position, Cherdak filed a patent infringement lawsuit against Nike and Apple, saying they licensed patents from PhatRat who alleging lied to the patent office to get its patents granted. Additionally, the patents that Nike and Apple licensed were in direct competition to his 269 and 445 patents. It was further stated that Nike and Apple engaged in the design, importation, distribution, and sale of athletic shoes and related technologies and products, including those that use the technologies outlined in the Cherdak patents.

He stated that Apple and Nike should have licensed the technology directly from him, [5] and that PhatRat and their lawyer, Mr. Vock, should have known that PhatRat’s patents were invalid, or at least they would have known that had they done due diligence in the research department.

One wonders at this juncture if there may also be a libel lawsuit arising out of this fiasco, since Mr. Vock, as a lawyer, would likely take a dim view of someone suggesting his research skills were lacking and that he may have missed the fact, inadvertently or on purpose, that the patents were invalid. But, that may become another spin off from this lawsuit.

It gets more complex in the statement of claim as Cherdak explains the invention technology he created. Cherdak’s system has embedded sensors like an accelerometer or GPS that keeps track of activity and exercise routes. Oddly enough, that is the same system PhatRat describes and the technology that the Nike + iPod uses.

The filing gets quite blunt in its remarks relating to PhatRat’s lawyer, suggesting that Cherdak’s valid patents were viewed merely as obstacles to be worked around; a move likened to unfair and anticompetitive trade practices. Cherdak alleges that instead of trying to buy the patent rights from him, Vock instead opted to materially misrepresent his two patents; a serious allegation that amounts to an accusation of predatory practices in the market. [6]

Misrepresentation cases, should one be brought against lawyer Vock, are often considered to be fraud cases and may be prosecuted criminally or civilly. In general, material misrepresentation is when someone deliberately makes a false statement to encourage a victim to part with property or money. Proving misrepresentation varies depending on whether the lawsuit is a civil or criminal one.

The usual elements for misrepresentation include: [7]
• A deceit/lie consisting of a false statement made on purpose or with reckless abandon that causes another to lose something
• Knowledge that what is being said is not true
• A material false statement
• A reliance on the false statement by the victim
• Damages or loss sustained

To prove material misrepresentation in a civil case, the standard of proof is based on the balance of probability, and not the criminal requirement of proof beyond a reasonable doubt. Of interest is the fact that the kind of evidence needed may well vary depending on how serious the allegations are. In other words, the more serious the accusations are, the greater degree of proof is required.

To win this case, Cherdak needs to be able to convince a court that PhatRat’s patents are invalid. Should that happen, his request for declaratory relief will be what he uses to deal with the two companies, meaning that their patents (146 and 380) would be declared invalid because they were improperly obtained from the United States Patent and Technology Office.

Far from being lawsuit prone, Cherdak appears to be striving to make an eminently valid point, which is that patent infringement is not acceptable and never will be. If someone does not act to protect their inventions/patents, the door would stand wide open to every enterprising person or company to come in and claim it and use it in their name. Someone has to draw a line in the sand and stand for the law. Cherdak seems to have taken on the mantle of patent protector and it will be fascinating to see the lawsuit unfold with these technology heavyweights.

Sources
[1] http://www.scribd.com/doc/75063909/Erik-Cherdak-vs-Apple-Nike-Curtis-Vock

[2] http://www.scribd.com/doc/50764491/Erik-Cherdak-vs-Nordstrom-Patent-infringement

[3] http://www.scribd.com/doc/75063909/Erik-Cherdak-vs-Apple-Nike-Curtis-Vock

[4] Id.

[5] http://www.macobserver.com/tmo/article/apple_nike_face_patent_lawsuit_over_ipod_accessories/

[6] http://www.macobserver.com/tmo/article/apple_nike_face_patent_lawsuit_over_ipod_accessories/, http://www.feedspew.com/article/news-apple-nike-face-patent-lawsuit-over-ipod-accessories-480293, http://lawyerintellectualproperty.com/apple-nike-face-patent-lawsuit-over-ipod-accessories-the-mac-observer/, http://www.scribd.com/doc/75063909/Erik-Cherdak-vs-Apple-Nike-Curtis-Vock

[7] http://legal.practitioner.com/regulation/standards_9_3_1.htm

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