DENVER (BRAIN) — Maybe 2022 will begin an era of peace, love and understanding in the bike industry, as Fox Factory and SRAM are starting the new year with a clean slate after agreeing to settle legal disputes dating to 2015.
Both sides filed documents with courts in Colorado and Illinois last Thursday saying they were dismissing claims and counterclaims, with each side to bear their own costs and attorneys fees.
According to a Fox filing with the SEC, Fox and SRAM agreed to dismiss their claims with no admission of liability by either. SRAM is granting Fox a non-exclusive license to make and sell products using SRAM's chainring-related patents in exchange for royalty rates. Fox is granting SRAM a non-exclusive royalty-free license to make and use products and services covered by Fox's axle patents.
In late 2015 SRAM sued RaceFace (which Fox had acquired in 2014) for infringing on two of its chainring patents. Several other brands offering similar chainrings had agreed to license the X-Sync technology from SRAM, but RaceFace took it to court and eventually challenged the patents' validity. In March 2021, a U.S. Patent and Trademark Office board sided with Fox on the chainring patent challenge, which may have encouraged settlement talks.
Separately, in 2016 Fox filed suit in California against SRAM, which owns RockShox, for infringing on several Fox-owned suspension and axle-related patents. That case was later moved to Colorado.
The litigation has cost both companies millions in legal fees. In 2020, Fox spent $1.96 million in patent-related litigation, down from $4.4 million in 2019 and $2.1 million in 2018.
In the first nine months of Fox's 2021 fiscal year, the company spent $900,000 on litigation, according to its third quarter report released in November.
Fox and SRAM are rivals for OE business on several fronts: most notably in suspension and dropper posts, where Fox and SRAM's RockShox are competitors, but also in road and mountain bike cockpit components and cranks (where Fox's Easton and RaceFace brands compete with SRAM's Zipp, Service Course, and Truvativ brands) and wheels (where Easton and Race Face compete with Zipp and SRAM).
Neither side had any comment on the settlement.
Related stories:
- U.S. Patent and Trademark Office board sides with Fox March 2021
- Appeals court sides with Fox, sends patent decision back to board Dec. 18, 2019
- Court agrees to move Fox/SRAM suspension case to Colorado Jan. 8, 2018
- Fox and SRAM suits continue in two states as costs mount Mar. 1, 2017
- SRAM licenses X-Sync design to Accell and Chromag Jan. 8, 2014
