Speedfit LLC v. Woodway USA, Inc.

53 F. Supp. 3d 561, 89 Fed. R. Serv. 3d 1898, 2014 U.S. Dist. LEXIS 145897, 2014 WL 5093161
CourtDistrict Court, E.D. New York
DecidedOctober 10, 2014
DocketNo. 13-CV-1276(KAM)(AKT)
StatusPublished
Cited by22 cases

This text of 53 F. Supp. 3d 561 (Speedfit LLC v. Woodway USA, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Speedfit LLC v. Woodway USA, Inc., 53 F. Supp. 3d 561, 89 Fed. R. Serv. 3d 1898, 2014 U.S. Dist. LEXIS 145897, 2014 WL 5093161 (E.D.N.Y. 2014).

Opinion

MEMORANDUM AND ORDER

MATSUMOTO, District Judge.

On March 11, 2013, plaintiffs Speedfit LLC (“Speedfit”) and Aurel A. Astilean (together, “plaintiffs”) filed an action for, inter alia, declaratory judgment invalidating defendants Woodway USA, Inc. (“Woodway”) and Douglas G. Bayerlein’s (together, “defendants”) patent for a manually-powered treadmill. (See generally ECF No. 1, Complaint.) Plaintiffs amended their complaint against defendants on June 17, 2013 to abandon their declaratory judgment claim and instead allege infringement of plaintiffs’ own patents for compdnents of a manually-powered treadmill. (See generally ECF No. 18, Amended Complaint (“Am. Compl.”).) Presently before the court is defendant Woodway’s motion, presumably pursuant to Fed. R.Civ.P. 12(b)(6),1 to dismiss plaintiffs’ patent infringement claims in favor of Wood-way’s pending declaratory judgment action against plaintiffs, currently before the Eastern District of Wisconsin, and to dismiss plaintiffs’ state law claims for failure to state a claim upon which relief can be granted. Woodway moves this court, in the alternative, for transfer of this case to the Eastern District of Wisconsin pursuant to 28 U.S.C. § 1404(a). For the reasons discussed below, Woodway’s motion to dismiss and motion to transfer are denied except as to plaintiffs’ breach of fiduciary duty claim, which is dismissed for failure to state a claim.

BACKGROUND

I. Factual Allegations in the Amended Complaint

The allegations in the Amended Complaint are taken to be true for purposes of [568]*568deciding a motion pursuant to Fed. R.CivJP. 12(b)(6), and concern the inven-torship and development of a manually-powered treadmill, currently marketed by Woodway as the “Curve” treadmill. Plaintiff Speedfit, founded by plaintiff Astilean, is a New York-based company that develops fitness programs and equipment. (Am. Compl. ¶¶ 3—4.) Together, Astilean, a former world-class athlete and resident of the Eastern District.of New York, and Speedfit have developed a patented fitness program to promote speed training and “the leg-powered, non-motorized treadmill” at the center of this litigation. (Id. ¶ 4.) Defendant Woodway is a Wisconsin-based corporation that manufactures and sells treadmills, including motorized models and the manually-operated Curve treadmill, both domestically and internationally. (Id. ¶ 5.) Defendant Bayerlein is the president of Woodway. (Id. ¶ 6.)

Astilean owns two active patents relating to a manually-powered treadmill: Nos. 8,308,619 (the “'619 Patent”), filed on October 29, 2010 and granted by the United States Patent and Trademark Office (“PTO”) on November 13, 2013, and 8,343,-016 (the “'016 Patent”), filed on November 1, 2010 and granted by the PTO on January 1, 2013. (Id. ¶¶7-8; see also Am. Compl. Exs. A, B.) Both the '619 and '016 Patents “relate generally to a motorless leg powered curved treadmill that allows the rider to walk, jog, run or sprint without making any adjustments to the treadmill other than shifting the user’s center of gravity forward or backwards.” (Id. ¶ 9.)

The events surrounding the development of the treadmill at issue are summarized below, based on the allegations of the Amended Complaint, which the court accepts as true for purposes of the instant motion. Astilean and Bayerlein first met at a fitness equipment trade show in San Francisco, California in the spring of 2002 and began discussing Speedfit’s exercise programs and equipment. (Id. ¶ 14.) Asti-lean and Bayerlein met in New York City on May 1, 2003, -at which time they executed a non-disclosure/cireumvention agreement. (Id. ¶ 15.) After signing the agreement, they discussed Speedfit’s idea for a non-motorized treadmill. (Id.) Astilean provided the specifications for his treadmill design to Woodway in 2004, and Woodway agreed to build a prototype at no cost to Speedfit or Astilean. (Id. ¶ 16.) Astilean and another business partner, Tami Mack, visited Woodway’s offices in May 2005 and signed a second non-disclosure/circumvention agreement with Wood-way. (Id. ¶ 17.) The agreement included the following terms:

1. Woodway has signed a non-disclosure agreement (the “NDA”) related to any designs and other information supplied by Speedfit. The NDA continues to be applicable to all disclosures made by Speedfit and all actions taken by Woodway as a result of said disclosures, including, without limitation, the construction of prototypes of personal exercise equipment based on Speedfit’s design.
[•••]
5. Speedfit owns every right of every kind in and to its designs and any other information supplied to Woodway, and to any prototypes that Woodway builds as a result thereof....

(Id.) Woodway completed the prototype by August 15, 2005. (Id. ¶ 18.) Speedfit requested extra operative parts, from Wood-way (chassis with belts) so that it could continue to refine the treadmill design. (Id.) On August 18, 2005, Woodway provided Speedfit with a memorandum acknowledging Speedfit’s invention of the treadmill and corresponding intellectual property rights, as well as proposed agreements for partnerships between the two companies [569]*569in the eventual sale of the product. (Id. ¶ 19.) The proposed agreements provided for some amount of money to be paid from Woodway to Speedfit. (Id.) Speedfit did not accept Woodway’s proposals. (Id.)

In December 2006, Astilean visited Woodway to supervise the ongoing construction of the latest version of the non-motorized treadmill, named the “Speed-board” by Speedfit. (Id. ¶ 20.) Speedfit and Woodway debuted the Speedboard at an industry show in the spring of 2007, with logos for both companies on the treadmill itself. (Id.) Plaintiffs allege upon information and belief that Woodway began selling the Speedboard to the public after the Spring 2007 trade show, without Speedfit’s consent. (Id. ¶ 22.) Woodway did not remit any of its profits from sale of the treadmill to Speedfit. (See id.)

After the trade show, Speedfit continued to work on the Speedboard design in efforts to render it totally manually-operated, as it still contained a motorized mechanism to adjust the treadmill’s incline. (Id. ¶ 21.) By May 2008, Speedfit had become frustrated with Woodway’s inability to meet Speedfit’s specifications for the prototype and undertook a re-design on its own. (Id. ¶ 23.) Speedfit completed a curved, wooden, fully non-motorized treadmill by August 2008. (Id. ¶ 24.) The new curved design (the “Curve”) allowed users to move to different sections of the treadmill in order to experience a greater incline, obviating the need for the industry-standard manual, motorized incline mechanism. (Id.)

Astilean filed a provisional patent application (No. 61/193,239) on November 7, 2008, before presenting the Curve to Woodway in order to build a model for public sale. (Id. ¶ 25.) Speedfit then sent Woodway the specifications for the Curve, along with the wooden version, for Wood-way to duplicate in metal. (Id.

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53 F. Supp. 3d 561, 89 Fed. R. Serv. 3d 1898, 2014 U.S. Dist. LEXIS 145897, 2014 WL 5093161, Counsel Stack Legal Research, https://law.counselstack.com/opinion/speedfit-llc-v-woodway-usa-inc-nyed-2014.