Navigating The IP Of Water Sports – Intellectual Property

The water sports industry has had steady wind in its sails, and
that breeze might be picking up. Market analysts expect the global
recreational boat market and water sports equipment market to reach
$54.9 billion and $55.2 billion, respectively, by
2027.¹ Like many other industries, the water sports
industry has and continues to feel the impacts of COVID-19. But
with the pandemic, the industry has also enjoyed a surge in
consumer demand for outdoor recreational activities and products,
resulting in, for example, an 8% increase in sales of personal
watercrafts, a 20% increase in sales of wake boats, and a 12%
increase in sales of freshwater fishing boats and pontoon boats in
2020.² In fact, U.S. boat sales reached a 13-year
high in 2020³, sales numbers the industry had not seen
since before the 2008 financial crisis. And the upward trend is not
limited to watercrafts. The industry has also benefited in an
uptick in sales of water sports equipment, ranging from clothing,
swim fins, swim masks and goggles, buoyancy control devices,
watches, life jackets, safety helmets, and other related
products.⁴ 

Along with the pandemic-driven demand, various other factors
have contributed to the recent growth in the U.S. water sports
industry. For example, the industry experienced a spike in new boat
buyers, increasing for the first time in a decade to about 100,000
consumers. In addition, the industry has expanded the services
available for consumers to experience the open waters without the
expense and responsibility of boat ownership. These include boat
subscription services that charge membership fees for access to
fleets of boats and other platforms that seamlessly allow boat
owners to rent their boats to consumers. Whether driven by
first-time boat ownership or expanding alternative services to boat
ownership, product innovation and technology development continue
to play an ever-increasing role in the market’s significant
rise. Indeed, a wide variety of technologies have been implemented
to ease boat operation, and in turn encourage participation and
increase the consumer base. A small sampling of these technologies
include remote start, joystick control, automatic docking, and
connected technologies that provide the ability to remotely monitor
a boat’s data (battery, fuel level, etc.) on a smart
phone.⁵ And other technologies and innovative
products surrounding water sports, from paddle boards and
hydrofoils to wake forming systems, are helping participants with a
wide variety of interests enjoy their time in the water and driving
consumer demand.

As water sports companies innovate and develop new products to
satisfy the booming demand, significant efforts have been made to
protect and enforce the related intellectual property (IP). The
following snapshot highlights the trends, technologies, and issues
from these recent IP efforts, while providing some takeaways as
water sports companies continue to innovate and keep pace with the
growing market.

U.S. Patent Filing Trends

Since 2015, companies and individual inventors have filed U.S.
patent applications for a diverse array of water sports-related
technology. Three technical categories, however, appear to clearly
top the list: (1) swimming or pool related products with over 180
patent application filings, (2) hydrodynamic features of hulls or
hydrofoils with over 120 patent application filings, and (3)
outdoor propulsion units with over 100 patent application filings.
Other technical areas in which water sports companies are actively
seeking patent protection include water sports or leisure vessels,
water sports boards, swimming aids, fishing equipment, buoys, and
vessel parts and accessories.⁶ 

As shown below, many different entities have been seeking U.S.
patent protection for their innovations related to water sports
technology.⁷

Not surprisingly, these entities include some of the most
well-known names in water sports, including Yamaha Motor Company,
Charlesbank Capital Partners, LLC (which acquired MasterCraft Boat
Company, LLC in 2007⁸), Kawasaki Heavy Industries, and
Malibu Boats.  The most active entities, however, appear to be
Yamaha Motor, Navico, and MasterCraft, with over 144 U.S. patent
application filings since 2015. 

Naturally, U.S. patent application filings by these entities
involve traditional technologies directed to the design of
watercrafts and watercraft accessories, such as, for example,
deployable platforms for the rear of the watercraft, devices that
modify the wake behind watercrafts for various water sports, and
watercraft navigation systems for detecting
hazards.⁹ This is not to say that innovations in
the industry are limited to the traditional aspects of boat and
watercraft hulls. Water sports companies have also sought patent
protection on technologies encompassing various connected
technologies to enhance the consumers’ water sports experience.
For example, Navico was granted a U.S. patent for an
“integrated display for a trolling motor” that can
display relevant marine data to the operator in the main housing or
foot pedal housing of the motor assembly.¹⁰ As
another example, Zodiac Pool Systems has sought patent protection
for an “aerial delivery of chemicals for swimming pools and
spas” that utilizes unmanned autonomous vehicles to dispense
chemicals.¹¹ As companies expend considerable
resources on product development to keep pace with growing consumer
demand, the technologies—and patent protection
efforts—falling under the umbrella of the water sports
industry will continue to increase in diversity and be integrated
with advancements in other industries.

Snapshot of IP Disputes

With robust market growth and tighter competition, companies in
the water sports industry have taken action to enforce and defend
their IP rights. One might expect that the companies most active in
seeking patent protection would also be the most active in patent
enforcement. As indicated by the chart below, however, that does
not always appear to be the case.¹² For example,
since 2015, one of the most active plaintiffs in U.S. patent
disputes appears to be i play. i play, recently rebranded as Green
Sprouts, is a “leading international baby product and
lifestyle brand” and has filed five patent infringement suits
since 2015, alleging infringement of its U.S. Patent No. 7,678,094
relating to reusable swim diapers.¹³

One company that does appear to be one of the most active in
both seeking and enforcing U.S. patents is Malibu Boats. Since
2015, Malibu Boats has filed five patent infringement suits against
three different defendants and defended the validity of one of its
patent in two Inter Partes Review proceedings at
the U.S. Patent and Trademark Office.¹⁴ According
to Malibu Boats, the nature of the patented technology involves,
for example, “revolutionary wake surf technology” that
“modifies the wake formed by a boat travelling through water,
which, in part, creates a better-quality surf wake and enables
users to surf on either side of the boat’s wake at the push of
a button.”¹⁵ To complement its IP portfolio
development and enforcement strategies, Malibu Boats has also been
active in monetizing its IP through various transactions. Malibu
Boat’s CEO has indicated that the company has licensed its IP
to more than 20 boating brands, including MasterCraft, Nautique
Boat Company, Chaparral Boats, and Tige Boats.¹⁶

Like the innovations encompassed by recent water sports patent
application filings, the technologies involved in recent patent
disputes in the water sports industry have also been diverse in
scope. These technologies have spanned from watercrafts to
rechargeable batteries and even to swimming materials. For example,
MHL Custom, Inc. filed patent infringement suits against Avante
Innovations, LLC in August 2020, and Waydoo USA, Inc. and Shenzhen
Waydoo Intelligence Technology Co., Ltd. in January
2021.¹⁷ The patents-in-suit are entitled
“Powered Hydrofoil Board” and “Weight-Shift
Controlled Personal Hydrofoil Watercraft” and involve personal
hydrofoil watercrafts connected with a propulsion system.

Other examples include Cayago’s suit against iAqua
Distribution LLC in 2019, asserting, among other things, patent
infringement based on iAqua’s alleged sales and offers to sell
“self-propelled watercraft vehicles with rechargeable
batteries.”¹⁸ The patents-in-suit are entitled
“Rechargeable Battery Unit for a Watercraft” and
“Watercraft Comprising a Redundant Energy Accumulator”
and involve personal watercraft technology, commonly referred to as
an underwater scooter, that partially supports the user’s upper
body and allows for traveling on the surface of water and
underwater. And in 2015, QBAS Co. Ltd., a “market leader[] in
diving and snorkeling products in the U.S. and around the
world,” filed suit against Sport Dimensions, Inc. and Body
Glove International, LLC, asserting patent infringement relating to
dive masks and a splash guard for a snorkel.¹⁹

Takeaways

Recent trends demonstrate that the water sports industry is
expected to maintain its growth trajectory, and as a result,
companies will continue to invest in IP protection and enforcement
strategies to complement their innovation and product development
efforts. Building a robust IP portfolio positions these companies
to strategically utilize their IP to fit and advance their business
needs as the market and competition grow. From an offensive
perspective, companies may consider enforcing their IP against
alleged infringers or monetizing their IP through licensing
programs. And from a defensive perspective, the IP can be leveraged
in an anticipated or existing dispute or simply deter potential
competitors from entering the field.

The evolving technology, expanding marketplace, and growing
competition of the water sports industry also stress the importance
of assessing the potential IP infringement risks and enforcement
opportunities. These analyses are valuable for effectively
executing business and legal decisions to meet the growing demand
of water sports consumers, particularly, for example, when a
company and/or its competitors expand and diversify their product
lines. Furthermore, other business strategies will require IP due
diligence and freedom-to-operate considerations. This includes, for
example, acquisition and collaboration opportunities.
Brunswick’s recent acquisition activity—the acquisition
of Freedom Boat Club, the largest boat club operator that provides
a service for paying members to have access to fleets of boats, and
Brunswick’s recent announcement of its plan to acquire Navico,
a provider of marine electronics, for $1.05
billion²⁰—emphasizes the significance of analyzing
IP issues in assessing the risks and valuation of a potential
acquisition opportunity.

Innovation and product development will continue to serve as key
components in capturing the ever-increasing pool of consumers in
the water sports industry. This recent snapshot of the industry
highlights for water sports companies the importance of protecting
their IP, assessing IP-related risks and opportunities, and taking
action against other IP threats.

Footnotes

1 Khushal Bombe, Recreational Boats Market to
Reach $54.9 billion by 2027, Growing at a CAGR of 7.8% from 2020
with COVID-19 Impact – Meticulous Research ®
Analysis, PR Newswire (Mar. 31, 2021, 08:30 ET),
https://www.prnewswire.com/news-releases/recreational-boats-market-to-reach-54-9-billion-by-2027–growing-at-a-cagr-of-7-8-from-2020-with-covid-19-impact—meticulous-research-analysis-301259454.html;
Laura Wood, $55.2 Billion Worldwide Water Sports Gear
Industry to 2027 – Rapid Growth of Online Retail Platforms
Present Opportunities, PR Newswire (Jul. 23, 2020),
https://www.prnewswire.com/news-releases/55-2-billion-worldwide-water-sports-gear-industry-to-2027—rapid-growth-of-online-retail-platforms-present-opportunities-301098739.html.

2 U.S. Boat Sales Reached 13-Year High in 2020,
Recreational Boating Boom to Continue through 2021, National
Marine Manufacturers Association (Jan. 6, 2021),
https://www.nmma.org/press/article/23527.

3 Broken down further, the U.S. boating industry saw a
total retail expenditure of $49.37 billion with 318,600 new boat
sales and 1,048,500 used boat sales in
2020. See CNBC, Why U.S. Boat Sales Are
Booming, YouTube (Jul. 28, 2021),
https://www.youtube.com/watch?v=hspyvIehlxs (citing statistics from
the National Marine manufacturers Association).

4 Roshan Deshmukh Priya, Report Overview: Water
Sports Gear Market by Product Type (Water sports Clothes, Wim Fins,
Swim Mask & Goggles, BCD {Buoyancy Control Device}, Watches,
Life Jackets, Safety Helmets, and Others), Age Group (Kids, Adults,
and Geriatric ), and Distribution Channel (Specialty Store,
Franchise Store, Online Store, Supermarket/Hypermarket, and
Others): Global Opportunity Analysis And Industry Forecast,
2020–2027, Allied Market Research (May 2020),
https://www.alliedmarketresearch.com/water-sports-gear-market-A06301.

5 See CNBC, supra note 3
(citing statistics from the National Marine Manufacturers
Association).

6 U.S. patent statistics come from reports generated by
Innography (Innography is a trademark of Clarivate and its
affiliated companies).  Innography: keyword search for
“scuba,” “watercraft,” “boat,”
“surf board,” “paddle board,”
“wetsuit,” “kayak,” “snorkel,”
“wake board,” “swim,” or “personal
watercraft” and excluding “car” in the abstract of
U.S. patent applications filed since January 1, 2015, and
organizing results by Cooperative Patent Classifications (CPCs).
Results included CPCs of Swimming or Splash Bath or Pools (E04 H4),
Hydrodynamic or Hydrostatic Features of Hulls or of Hydrofoils (B63
B1), Accessories for Angling (A01 K97), Water Sports Boards (B63
B32), Vessels Specially Adapted for Water Sports or Leisure;
Body-supporting Devices Specially Adapted for Water Sports or
Leisure (B63 B34), Outboard Propulsion Units (B63 H20), and Sports
Game Amusements: Swimming (A63 B31).

7 Id. (organizing results by
Organization).

8 Maura M. Turner, Charlesbank Capital Partners
and Transportation Resource Partners Acquire MasterCraft Boat
Company, Intrado GlobeNewswire (Oct. 4, 2007),
https://www.globenewswire.com/news-release/2007/10/04/1109335/0/en/Charlesbank-Capital-Partners-and-Transportation-Resource-Partners-Acquire-MasterCraft-Boat-Company.html.

9 See  U.S. Patent No. 10,703,446; U.S.
Patent No. 9,174,703; U.S. Patent Application Publication No.
2017/0365175.

10 U.S Patent No. 9,840,312.

11 U.S. Patent Application Publication No.
2020/0377213.

12 Innography keyword search for litigations where the
patent(s) at issue had an abstract including the word
“scuba,” “watercraft,” “boat,”
“surf board,” “paddle board,”
“wetsuit,” “kayak,” “snorkel,”
“wake board,” “swim,” or “personal
watercraft,” and excluding “car.” For purposes of
clarity, the chart omits certain data for cases unrelated to the
water sports industry.

13 International Swim and Sun Wear Baby Brand, i
play., Announces Rebrand to green sprouts, PR Newswire (Jan.
30, 2020),
https://www.prnewswire.com/news-releases/international-swim-and-sun-wear-baby-brand-i-play-announces-rebrand-to-green-sprouts-300995368.html; 
see  i play, Inc. v. In Mocean Grp., LLC, 1:17-CV-06659
(S.D.N.Y. Sept. 1, 2017); i play, Inc. v. Shenzhen Adsel Trade Co.
Ltd., 1:17-CV-00211 (W.D.N.C. Aug. 2, 2017); i play, Inc. v. In
Mocean Grp., LLC, 1:16-CV-00393 (W.D.N.C. Dec. 8, 2016); i play,
Inc. v. Jade Swimwear, LP, 1:16-CV-00345 (W.D.N.C. Oct. 21, 2016);
i play, Inc. v. Triple 8 Corp., 1:16-CV-00343 (W.D.N.C. Oct. 21,
2016).

14 See  Malibu Boats, LLC v. Go Surf
Assist, LLC, 6:20-CV-00552 (W.D. Tex. June 18, 2020); Malibu Boats,
LLC v. Skier’s Choice, Inc., 3:19-CV-00225 (E.D. Tenn. June 19,
2019); Malibu Boats, LLC v. Skier’s Choice, Inc., 3:18-CV-00015
(E.D. Tenn. Jan. 12, 2018); Malibu Boats, LLC v. MasterCraft Boat
Co. LLC, 3:16-CV-00082 (E.D. Tenn. Feb. 16, 2016); Malibu Boats,
LLC v. MasterCraft Boat Co. LLC, 3:15-CV-00276 (E.D. Tenn. June 29,
2015); MasterCraft Boat Co. LLC v. Malibu Boats, LLC, IPR2016-01058
(P.T.A.B. Nov. 16, 2011); MasterCraft Boat Co. LLC v. Malibu Boats,
LLC, IPR2016-01057 (P.T.A.B. Nov. 16, 2011).

15 Complaint at 2, Malibu Boats, LLC v. Go Surf Assist,
LLC, 6:20-CV-00552 (W.D. Tex. June 18, 2020).

16 Andrew Karpan, Jury Wipes Out
Wakesurfer’s Patent Claims Against Boat Co., Law360 (May
24, 2021), https://www.law360.com/articles/1386711.

17 See  MHL Custom, Inc. v. Avante
Innovations, LLC, 3:20-CV-01648 (S.D. Cal. Aug. 24, 2020) (alleging
patent infringement of U.S. Patent Nos. 9,359,044 and 9,586,659);
MHL Custom, Inc. v. Waydoo USA, Inc. et al, 1:12-CV-00091 (D. Del.
Jan. 27, 2021) (alleging patent infringement U.S. Patent Nos.
9,359,044 and 9,586,659).

18 Complaint at 3–6, Cayago Tec, GMBH et al v.
iAqua Distribution LLC, 0:19-CV-62689 (S.D. Fla. Oct. 29, 2019)
(alleging patent infringement of U.S. Patent Nos. 9,694,888 and
9,774,019).

19 Complaint at 3–4, QBAS Co., Ltd. et al v. Sport
Dimensions, Inc. et al, 2:15-CV-07483 (C.D. Cal. Sept. 23, 2015)
(alleging patent infringement of U.S. Patent Nos. 6,994,085 and
5,860,168).

20 Brunswick Completes Acquisition of Freedom Boat
Club, Intrado GlobeNewswire (May 20, 2019),
https://www.globenewswire.com/news-release/2019/05/21/1840380/0/en/Brunswick-Completes-Acquisition-of-Freedom-Boat-Club.html; 
Brunswick to Acquire Navico, Navico (Jun. 24, 2021),
https://navico.com/2021/06/24/brunswick-to-acquire-navico/.

Originally published by Sports Litigation Alert

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