Wave vs. Wave: Breaking News in San Diego’s War Between the Surf Machines
Stand on any beach on any ocean, and one of the things you will eventually notice about waves is that they keep coming—which might turn out to be the case with legal disputes over wave-making technology as well.
It certainly seemed that way last year, when I wrote about a startup in Solana Beach, CA, called American Wave Machines, or AWM. Founder Bruce McFarland and his wife Marie started the company in 2000 to develop his ideas for SurfStream, a machine capable of generating a standing wave big enough for paying customers to surf. But AWM’s hopes for a glassy ride to the green room got pitched in the soup in 2008, when San Diego’s “wave war” began.
McFarland’s former boss, Tom Lochtefeld, filed a patent infringement suit, alleging that AWM’s technology was infringing on patents that Lochtefeld and his company, San Diego-based Wave Loch, have been commercializing since 1991. Lochtefeld was all amp’d about McFarland dropping in on his wave—or what he said was his wave. It was like a field day at the courthouse for all the men in the gray suits. AWM denied Lochtefeld’s allegations, and asked a federal judge in San Diego to suspend the litigation until the patent office has conducted an official review of the claims asserted by Lochtefeld and Wave Loch.
So it seemed like victory at sea for AWM when I got a press release this week (from AWM) that says the U.S. Patent and Trademark Office (USPTO) “has invalidated each of the 27 patent claims asserted by Wave Loch in its patent infringement claim against American Wave Machines.”
In an e-mail, the lawyer for AWM, Gil Cabrera, says, “Once the USPTO issues the Reexamination Certificate consistent with its final rejection of Lochtefeld’s claims, we will file a motion to dismiss the entire case because none of the claims he asserted against AWM survived reexamination.”
Cabrera says the patent office ruling puts AWM in a “great position to ultimately prevail in the litigation.” But when I asked Lochtefeld for his response, he was like, Whoa. Wait a minute Ho-dad. He tells me by e-mail: “Bruce. Your information is false.” Then he calls me—from London—to say, “There are still patent claims outstanding. I met with the patent office yesterday and they have approved numerous other claims that make our patents even stronger.”
So I check back with Cabrera, and he says, “Basically, every claim [Lochtefeld] challenged was rejected by the USPTO. He amended his claims and some of those amendments were allowed. So his patents are going to issue, just without any of the claims he claimed AWM was infringing. He’ll likely try to argue that the new claims are infringed, but the problem is that would only start from when the new amended patent is issued—in which case nothing AWM has done to date would be infringing. And it is our belief that the new claims are also subject to challenge and are not being infringed… this ruling puts AWM on track to dismissal of the claims.”
An hour or two later, I get a call from W. David Osborne, who is the general counsel for Wave Loch, and he says that Lochtefeld called him from London too, and he’s sending me a press release titled, “Wave Loch Must Once Again Set the Record Straight Regarding American Wave Machines’ Misrepresentations.”
In its statement, Wave Loch says, “neither the litigation nor the USPTO process is complete” and as a result of the patent review, “Wave Loch now expects the patents asserted against AWM to emerge from the reexamination process even stronger and to be able to add more claims against AWM… AWM, however, continues to attempt to sell the SurfStream, and by doing so, continues to place itself and its customers at risk of being subject to injunctive relief and significant monetary damages.”
A lot of shoobies and other right coasters seem to think that California surfers are easy-going, like Jeff Spicoli in “Fast Times at Ridgemont High” or the sea turtles in “Finding Nemo.” But if you start messing with their waves—dude!—they can go aggro in a heartbeat! And so San Diego’s wave war continues—-the arguments pounding, pounding, pounding.