Fitness behemoth F45 has lost a four-year court battle with a fast-growing rival who was accused of copying its patented workout technology — and, as an insult to injury, lost two of its patents in the process.
Melbourne-based Body Fit Training (BFT), self-described as Australia’s fastest-growing fitness franchise, went head-to-head in the Federal Court with F45, which now boasts over 1750 franchises in 45 countries and is backed by Hollywood heartthrob Mark Wahlberg, among others.
The arguments in court centred around the electronic coaching system both gyms use. Lawyers for F45 say BFT copied the idea by configuring their fitness studios from a central server — a similar set-up to the patented system F45 uses whereby a computer network fires out exercise routines to all studios that gym-goers watch as they work out.
Not only did Justice John Nicholas side with BFT in finding the company had not infringed upon F45’s patents, he also found the patents were invalid and should be revoked altogether, citing the unusualness of patenting “generic computing technology”.
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“It is the kind of scheme that has, historically, never been regarded as patentable subject matter,” Nicholas remarked in his judgement.
Under current Australian law, a standard patent can be obtained for an invention that is new, involves an inventive step and is able to be made or used in an industry. By “inventive step”, the guidelines state the invention cannot be something that’s easy for someone to do if they have knowledge and experience in the technological field of the invention. Crucially, to be patented, the invention must be different somehow from existing technology.
So how did this happen? The landscape of intellectual property has changed significantly in the five years since F45 filed their patent, according to Mia De Leo, a commercial lawyer at Law Squared.
“IP Australia is often playing catch up with the technology and software industry in respect of how and whether IP rights can (or should) be attached to technology — and what elements — as a result of the speed that the industry moves in and the time it takes to successfully complete the registration process,” she says.
F45 has also been ordered to pay BFT’s court costs.
Joint CEOs Cameron Falloon and Richard Burnet, who sold BFT’s IP to US-based Xpontential Fitness for $60 million last year amid the saga, say they are “thrilled” by the court case result.
“The Federal Court has determined that both of F45’s innovation patents are invalid and that, even if those patents were valid, BFT did not infringe them in any event,” they said in a joint statement.
“We look forward to continuing to offer a different and better product, as Australia’s fastest-growing fitness franchise.”
The battle heads overseas now, where F45 is waging a similar case in the US courts — but the result from the Federal Court is not necessarily an indication of things to come, De Leo continues.
“Different legislation will govern the battle over there and the rules differ, country to country,” she explains.
When approached about the result of the Australian Federal Court case, F45 said it does not comment on ongoing legal matters.
De Leo says there are a couple of lessons Australian business owners can glean from the four-year saga between F45 and BFT.
“Depending on what kind of technology you use in your business and how it’s implemented, you want to be sure that any IP associated with it is protected, whether that be by registration or the appropriate contractual agreements,” she advises.
“You also want to be sure that any IP you use in your business (including as part of the technology), if it wasn’t created by you, has been appropriately licenced from its creator.
“This will give you comfort that you have the right to use that IP.”