There's only one lawsuit that I know about. Go to Edgar or to directfocusinc.com and select 10Q's and then select the S-1 for the Initial Registration Statement. Here are excerpts related to the Soloflex litigation. Does anyone know if the case has gone ahead on schedule (July 6 , 1999)?
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WE FACE RISKS RELATING TO PENDING LITIGATION WITH SOLOFLEX, INC.
Soloflex, Inc., a company that manufactures and directly markets home
fitness equipment, has filed an action against Direct Focus and Randal R.
Potter, our Vice President of Marketing. Soloflex is claiming that we are
improperly using certain slogans and images to market our Bowflex products and
that we have misappropriated some of its marketing trade secrets. We intend to
vigorously defend against these claims, which we believe lack merit. However, we
cannot assure you that we will prevail in this dispute. If Soloflex successfully
prosecutes any of its claims, the resulting monetary damages and/or injunctive
relief could significantly harm our business. See "Legal Proceedings."
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LEGAL PROCEEDINGS
On May 1, 1998, Soloflex, Inc., a company that manufactures and directly
markets home fitness equipment, filed an action against Direct Focus and Randal
R. Potter, our Vice President of Marketing, in the United States District Court
for the District of Oregon. The suit is titled Soloflex, Inc. v. Bowflex, Inc.
and Randy Potter, Cause No. 98-557-JO. The judge has set a trial date of July 6,
1999, and both parties are now proceeding with discovery.
Soloflex is pursuing two categories of claims, both of which relate to
activities that allegedly violate its intellectual property rights. First,
Soloflex claims that we violated the Lanham Act, which relates to trademark and
trade dress infringement, and infringed upon several of its copyrights. The
principal basis for these claims is Soloflex's contention that our print and
video advertisements are too similar to its advertisements. For example,
Soloflex asserts that we are prohibited from marketing our products with
advertisements that: (1) feature Mr. Potter, a former model for Soloflex; (2)
feature an image of Mr. Potter removing his shirt; or (3) use phrases with the
words "unlock your body's potential" or "the body you always wanted."
Second, Soloflex claims that we misappropriated certain of its marketing
trade secrets. The principal basis for this claim is Soloflex's allegation that
Mr. Potter had access to marketing knowledge and physical documents while an
employee of Soloflex, and that Mr. Potter improperly used this knowledge and
documentation to our competitive advantage. Soloflex further alleges that we
hired another Soloflex employee, who also possessed this type of information,
for the specific purpose of acquiring such information and obtaining a
competitive advantage.
Soloflex has requested both monetary damages and injunctive relief in
connection with its claims. Specifically, Soloflex is seeking to recover: (1)
any profits it would have earned but for our allegedly improper activities; (2)
any profits we earned during the period when an alleged violation may have
occurred; and/or (3) the cost of corrective advertising to remedy the allegedly
"false impressions" created by our advertising activities. The injunctive relief
that Soloflex is seeking would prohibit us from airing advertisements that
allegedly would infringe upon Soloflex's intellectual property rights. We intend
to vigorously defend against these claims, which we believe lack merit. However,
we cannot assure you that we will prevail in this dispute. If Soloflex successfully
prosecutes any of its claims, the resulting monetary damages and/or injunctive
relief would significantly harm our business. See "Risk Factors - Soloflex
Litigation."
We are also involved in various legal proceedings incident to the ordinary
course of our business. We believe that the outcome of these pending legal
proceedings will not, in the aggregate, have a material adverse effect on our
business.
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