Case 2:05-cv-00527-DF Document 47 Filed 09/15/06 Page 1 of 9

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION

§ CYBERGYM RESEARCH LLC, § A Texas Limited Liability Company, § § Plaintiff, § CASE NO.: 2:05-cv-527- DF § v. § § ICON HEALTH & FITNESS, INC., § A Delaware corporation; , § ROEBUCK AND CO., a New York § corporation; COSTCO WHOLESALE § CORP., a Washington corporation; THE § SPORTS AUTHORITY, INC., a § Delaware Corporation; and DICK’S § SPORTING GOODS, INC., § a Delaware corporation, § § Defendants. § §

FIRST AMENDED COMPLAINT FOR PATENT INFRINGEMENT AND WILLFUL PATENT INFRINGEMENT

Plaintiff Cybergym Research LLP (“Cybergym”) alleges against each of the Defendants

ICON Health & Fitness, Inc. (“ICON”), Sears, Roebuck and Co. (“Sears”), Costco Wholesale

Corp. (“Costco”), The Sports Authority, Inc. (“Sports Authority”), and Dick’s Sporting Goods,

Inc. (“Dick’s”) (collectively, the “Defendants”), jointly and severally, as follows:

NATURE OF THE ACTION

1. This is an action for patent infringement arising out of infringement of Cybergym’s

U.S. Patent No. 6,193,631 issued on February 27, 2001 (the “‘631 Patent”) and U.S. Patent No.

6,749,537 issued on June 15, 2004 (the “‘537 Patent”). This action is brought to remedy the

infringement of the ‘631 Patent and the ‘537 Patent by Defendants, including, but not limited to,

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Defendants’ direct patent infringement, Defendants’ inducing of others to infringe Cybergym’s patents, as well as Defendants’ contributory patent infringement. This action seeks preliminary and permanent injunctive relief and compensatory damages against all Defendants, as well as exemplary damages including but not limited to exemplary damages for willful infringement against ICON, attorneys’ fees, and costs.

THE PARTIES

2. Plaintiff Cybergym is a Texas limited liability company duly organized and existing under the laws of the State of Texas. Cybergym is the owner of the ‘631 Patent and the ‘537

Patent and is an innovator of exercise and health equipment. Cybergym is the owner of all right, title, and interest in the ‘631 Patent and the ‘537 Patent, which are entitled “Force Script

Implementation Over a Wide Area Network” and “Method and Apparatus for Remote Interactive

Exercise and Health Equipment,” respectively.

3. On information and belief, Defendant ICON is or purports to be a Delaware corporation with its offices in Wilmington, Delaware, and Logan, Utah. Cybergym is informed and believes, and on that basis alleges, that ICON has made and used and offered for sale, sold, and continues to make, use, offer for sale, and sell products and/or services that directly or contributorily infringe, and has induced and continues to induce infringement of, the ‘631 Patent and the ‘537 Patent within this District, and that ICON’s employees, agents, and representatives frequent this District to conduct business on behalf of ICON.

4. On information and belief, Defendant Sears is or purports to be a New York corporation headquartered in Hoffman Estates, Illinois. Cybergym is informed and believes, and on that basis alleges, that Sears has offered for sale, sold, and continues to offer for sale and sell products and/or services that directly or contributorily infringe, and has induced and continues to

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induce infringement of, the ‘631 Patent and the ‘537 Patent within this District, and that Sears’

employees, agents, and representatives conduct business in this District on behalf of Sears.

5. On information and belief, Defendant Costco is or purports to be a Washington

corporation headquartered in Issaquah, Washington. Cybergym is informed and believes, and on

that basis alleges, that Costco has offered for sale, sold, and continues to offer for sale and sell products and/or services that directly or contributorily infringe, and has induced and continues to induce infringement of, the ‘631 Patent and the ‘537 Patent within this District, and that Costco’s

employees, agents, and representatives conduct business in this District on behalf of Costco.

6. On information and belief, Defendant Sports Authority is or purports to be a Delaware

corporation headquartered in Englewood, . Cybergym is informed and believes, and on that basis alleges, that Sports Authority has offered for sale, sold, and continues to offer for sale and sell products and/or services that directly or contributorily infringe, and has induced and continues to induce infringement of, the ‘631 Patent and the ‘537 Patent within this District, and that Sports Authority’s employees, agents, and representatives conduct business in this District on behalf of Sports Authority.

7. On information and belief, Defendant Dick’s Sporting Goods is or purports to be a

Delaware corporation headquartered in Coraopolis, Pennsylvania. Cybergym is informed and believes, and on that basis alleges, that Dick’s Sporting Goods has offered for sale, sold, and continues to offer for sale and sell products and/or services that directly or contributorily infringe, and has induced and continues to induce infringement of, the ‘631 Patent and the ‘537

Patent within this District, and that Dick’s Sporting Goods employees, agents, and representatives conduct business in this District on behalf of Dick’s Sporting Goods.

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JURISDICTION AND VENUE

8. This action arises under the patent laws of the , 35 U.S.C. §§ 101, et seq.

This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. §§ 1331

and 1338(a) and (b). Venue is proper in this District pursuant to 28 U.S.C. §§1391(b) - (c) and

1400(b) in that Defendants have used, sold, offered for sale, imported, distributed, or otherwise

commercially exploited in this District products and/or services that directly or contributorily

infringe upon the ‘631 Patent and the ‘537 Patent owned by Cybergym, as well as induced

infringement of Cybergym’s patents, and these acts of infringement by Defendants are

continuing in this District.

BACKGROUND FACTS

9. A true and correct copy of the ‘631 Patent is attached hereto as Exhibit 1, and

incorporated by this reference.

10. A true and correct copy of the ‘537 Patent is attached hereto as Exhibit 2, and

incorporated by this reference.

11. ICON is believed to have incorporated Cybergym’s patented technology in products

and/or services developed and/or marketed by ICON incorporating ICON’s iFIT technology,

including but not limited to those products known as the NordicTrack SL 760 iFIT recumbent

exercise bike, NordicTrack SL 710 iFIT recumbent exercise bike, NordicTrack SL 705 iFIT

upright exercise bike, NordicTrack CX 990 iFIT elliptical, and NordicTrack C 2420 iFIT treadmill, without authorization from Cybergym.

12. Sears, Costco, Sports Authority, and Dick’s Sporting Goods are believed to be

marketers, distributors, advertisers, and/or sellers of the products developed and/or marketed by

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ICON, including which incorporate Cybergym’s patented technology without authorization from

Cybergym.

13. Cybergym is informed and believes, and on that basis alleges, that ICON has directly

and/or contributorily infringed the ‘631 Patent and the ‘537 Patent and has induced others to infringe Cybergym’s patents through ICON’s manufacturing, use, advertising, sales, and marketing efforts.

14. Cybergym is informed and believes, and on that basis alleges, that despite knowledge of Cybergym’s patented technology, ICON has continued willfully to use, make, offer to sell,

sell, and import products and/or services that infringe the ‘631 Patent and the ‘537 Patent, or to

contribute to and/or induce others, such as Defendants Sears, Costco, Sports Authority, and

Dick’s Sporting Goods and their customers, to infringe the ‘631 Patent and the ‘537 Patent.

15. Cybergym is informed and believes, and on that basis alleges, that Defendants Sears,

Costco, Sports Authority, and Dick’s Sporting Goods have directly and/or contributorily

infringed the ‘631 Patent and the ‘537 Patent and have induced others to infringe Cybergym’s

patents through their advertising, sales, distribution, and marketing efforts.

FIRST CLAIM FOR RELIEF

(Patent Infringement)

16. Plaintiff repeats and realleges the allegations set forth in Paragraphs 1 through 15,

above, as if set forth in full herein.

17. The ‘631 Patent and the ‘537 Patent were duly and legally issued on February 27,

2001 and on June 15, 2004, respectively. Plaintiff is the owner of all right, title, and interest in

the ‘631 Patent and the ‘537 Patent, together with all rights to sue and recover damages for all

accrued and other patent infringements, whether past, present, or future.

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18. Cybergym is informed and believes, and on that basis alleges, that Defendants are

now infringing, contributorily infringing, or actively inducing infringement by others of at least

one claim of the ‘631 Patent and/or the ‘537 Patent by making, using, offering to sell, importing

into, or selling within this District and elsewhere in the United States, without license or authority from Plaintiff, certain products and/or services or technologies that infringe at least one

claim of the ‘631 Patent and/or the ‘537 Patent, including but not limited to those products

known as the NordicTrack SL 760 iFIT recumbent exercise bike, NordicTrack SL 710 iFIT

recumbent exercise bike, NordicTrack SL 705 iFIT upright exercise bike, NordicTrack CX 990

iFIT elliptical, and NordicTrack C 2420 iFIT treadmill and products incorporating iFIT

technology.

19. Cybergym is informed and believes, and on that basis alleges, that by reason of the above acts, Defendants have caused, are causing, and, unless enjoined and restrained by this

Court, will continue to cause Plaintiff great and irreparable injury to, among other things, the value of the ‘631 Patent and the ‘537 Patent and Cybergym’s current and prospective business relations, all of which cannot be adequately measured or compensated in money damages.

Plaintiff has no adequate remedy at law and is entitled to injunctive relief enjoining and restraining Defendants, their officers, agents, servants, employees, partners, contractors, licensees, affiliates, and attorneys, and those persons in active concert or participation with them, including but not limited to Defendants’ distributors, resellers, and customers, from further manufacture, sales, offers for sale, importation, other distribution, or use of any infringing product and/or service.

20. As a direct and proximate result of Defendants’ infringement of one or more claims of the ‘631 Patent and/or the ‘537 Patent, Plaintiff has been, and continues to be, irreparably

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harmed and otherwise severely damaged in an amount yet to be determined. Cybergym is informed and believes, and on that basis alleges, that, unless enjoined, Defendants will continue their infringing activities.

21. This is an exceptional case pursuant to 35 U.S.C. § 285, such that Defendants are liable to Plaintiff for its attorneys’ fees and costs in prosecuting this action.

SECOND CLAIM FOR RELIEF

(Willful Patent Infringement)

22. Plaintiff repeats and realleges the allegations set forth in Paragraphs 1 through 21,

above, as if set forth in full herein.

23. Cybergym is informed and believes, and on that basis alleges, that ICON’s acts of

patent infringement as set forth herein are and continue to be willful, malicious, wanton, and

intentional, and Plaintiff is entitled to its damages against ICON to be trebled pursuant to 35

U.S.C. § 284.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays for relief against Defendants as follows:

1. On the First and Second Claims for Relief, pursuant to Fed. R. Civ. Proc. 65, for

preliminary and permanent injunctive relief enjoining Defendants, their officers, agents, servants,

employees, partners, contractors, licensees, affiliates, and attorneys, and those persons in active

concert or participation with them, including but not limited to Defendants’ distributors,

resellers, and customers, from further manufacture, sales, offers for sale, importation, other

distribution, or use of any infringing products and/or services;

2. On the First Claim for Relief, for compensatory damages in an amount to be proven at trial and for attorneys’ fees and costs;

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3. On the Second Claim for Relief, for compensatory damages in an amount to be proven

at trial, for such damages against ICON to be trebled, and for attorneys’ fees and costs;

4. For pre-judgment interest at the rate as allowed by law;

5. For Plaintiff’s attorneys’ fees and costs as allowed by law; and,

6. For such other and further relief as the Court deems just and proper.

Plaintiff demands a trial by jury.

Respectfully submitted,

By: Michael C. Smith State Bar No. 18650410 Carl R. Roth State Bar No. 17312000 THE ROTH LAW FIRM 115 N. Wellington, Suite 200 Marshall, TX 75670 Telephone: (903) 935-1665 Facsimile: (903) 935-1797 Email: [email protected]

ATTORNEY FOR PLAINTIFF CYBERGYM RESEARCH LLC

OF COUNSEL:

Jack Russo, Cal State Bar No. 96068 Tim C. Hale, Cal State Bar No. 114905 William C. Milks, III, Cal State Bar No. 114083 RUSSO & HALE LLP 401 Florence Street Palo Alto, CA 94301 Telephone: (650) 327-9800 Facsimile: (650) 327-3737 Email: [email protected] Email: [email protected] Email: [email protected]

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CERTIFICATE OF SERVICE

The undersigned hereby certifies that all counsel of record who are deemed to have consented to electronic service are being served with a copy of this document via the Court’s

CM/ECF system per Local Rule CV-5(a)(3) this 15th day of September, 2006. Any other counsel of record will be served by facsimile transmission and/or first class mail.

______Michael C. Smith

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