Nautilus acquires Octane Fitness for $115 Million

By Gene Quinn
January 5, 2016

Dennis Lee and Tim Porth founded Octane Fitness in 2007.

Dennis Lee and Tim Porth founded Octane Fitness in 2007.

Yesterday, North Castle Partners announced the sale of Octane Fitness, LLC, a leading manufacturer of zero-impact cardiovascular fitness equipment, to Nautilus, Inc. (NYSE: NLS) for a purchase price of $115 million.

Those familiar with the patent industry will readily recognize the name Octane Fitness. It was Octane Fitness, the much smaller company that successfully sued and prevailed in a patent infringement lawsuit against ICON Health & Fitness. The case would go all the way to the United States Supreme Court on the issue of attorneys’ fees. A unanimous Supreme Court ruled that the district court has broad discretion to award attorneys’ fees under Section 285 of Title 35 of the United States Code. See Octane Fitness, LLC v. ICON Health & Fitness, Inc.

Rudy Telsher represented Octane Fitness, and in July 2015, I had an opportunity to speak to him on the record. Telsher explained that many people incorrectly jumped to the conclusion that Octane was a patent troll. Quite to the contrary, ICON accused Octane of infringing one of its patents that was never commercialized, “so in that sense [ICON] was a non-practicing entity as to the patent and suit,” Telscher explained. “[Octane] had award winning technology covered by a different patent.”


When I learned of the acquisition of Octane Fitness by Nautilus, I reached out to Telsher for a comment. “Happy ending to a long battle,” Telscher said. “Octane did it by the book. They developed award-winning technology. When that technology got challenged by ICON, under the pretense of patent claims that never should have been brought, they defended all the way to the Supreme Court. A fabulous ending to a little guy stands up to the big guy battle.”

For North Castle Partners, a leading private equity firm focused on consumer businesses that promote healthy, active and sustainable living, the deal represents another successful transaction in the fitness sector. “Our partnership with the Octane Fitness team is the most recent example of North Castle’s vision of realizing the power of values-based partnerships and experienced operating resources to help entrepreneurs take their companies to the next stage of their development – what we call ‘Full Potential Partnerships,'” said Chip Baird, CEO and Founder of North Castle Partners.

Alison Minter, Managing Director of North Castle Partners, added, “As a focused fund with nearly two decades of experience in the Healthy, Active and Sustainable Living market, and eight investments in the fitness sector over the last 15 years, we were able to leverage deep expertise in the fitness industry in partnership with the Octane team to build on their track record of innovating award-winning, patent-protected zero-impact cardiovascular fitness products.”

According to Dennis Lee, founder and CEO of Octane Fitness, “North Castle’s experience in the fitness industry and values-based approach to partnering with management teams is what drew us to the organization. We are excited to join Nautilus’s family of outstanding fitness brands and products.”

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

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