Nautilus 2015 Annual Report Download - page 8
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Please find page 8 of the 2015 Nautilus annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.INTELLECTUAL PROPERTY
Trademarks, patents and other forms of intellectual property are vital to the success of our business and are an essential factor in maintaining our competitive
position in the health and fitness industry.
Trademarks
We own many trademarks including Nautilus ® , Bowflex ® , Max Trainer ® , TreadClimber ® , Power Rod ® , Bowflex Revolution ® , SelectTech ® , Octane Fitness
® , LateralX ® , xRide ® , Zero Runner ® , Airdyne ® , and Universal ® . Nautilus is the exclusive licensee under the Schwinn ® mark for indoor fitness products. We
believe that having distinctive trademarks that are readily identifiable by consumers is an important factor in creating a market for our products, maintaining a
strong company identity and developing brand loyalty among our customers. In addition, we have granted licenses to certain third-parties to use the Nautilus,
Schwinn and TreadClimber trademarks on commercial fitness products, for which we receive royalty income and expanded consumer awareness of our brands.
Each federally registered trademark is renewable indefinitely if the trademark is still in use at the time of renewal.
Patents and Designs
Building our intellectual property portfolio is an important factor in maintaining our competitive position in the health and fitness equipment industry. We have
followed a policy of filing applications for U.S. and non-U.S. patents on utility and design inventions that we deem valuable to our business.
We own or license patents and design registrations covering a variety of technologies, some of which are utilized in our selectorized dumbbells, treadmills,
exercise bikes, and elliptical machines. Patent and design protection for these technologies, which are utilized in products sold in both the Direct and Retail
segments, extends as far as 2028.
We maintain a portfolio of patents related to our TreadClimber ® specialized cardio machines, which are sold primarily in our Direct segment. The portfolio
includes approximately 25 issued U.S. patents covering various product features and other technologies associated with our TreadClimber ® products and 1 issued
U.S. patent and additional pending patents covering various product features of our Max Trainer ® products. Nautilus is also the licensee of patents that cover the
Bowflex Revolution ® home gyms.
A patent covering certain aspects of our TreadClimber ® products expired in 2013. Additional individual U.S. patents covering elements of our TreadClimber ®
products have expiration dates ranging from 2021 to 2027. Expiration or invalidity of patents within our TreadClimber ® portfolio could trigger the introduction of
similar products by our competitors. Although we view each of the patents within our portfolio as valuable, we do not view any single patent as critical to our
success or ability to differentiate our TreadClimber ® products from similar products that may be introduced by competitors in the future. We regularly monitor
commercial activity in our industry to guard against potential infringement. We protect our proprietary rights and take prompt, reasonable actions to prevent
counterfeit products and other infringement on our intellectual property.
BACKLOG
We define our customer order backlog to include firm orders for future shipment to our Retail customers, whether or not subject to cancellation, as well as
unfulfilled consumer orders within the Direct segment.
Backlog as of a given date fluctuates based on specific timing of product shipment within the typical shipment timeframes for each of our segments. Retail orders
comprise the larger portion of our order backlog, while Direct orders comprise a smaller portion of our backlog due to shorter fulfillment timeframes.
Our customer order backlog as of December 31, 2015 and 2014 was approximately $5.0 million and $21.1 million , respectively. The decrease in the overall
backlog as of December 31, 2015 compared to 2014 resulted from delays in 2014 in the receipt of merchandise due to the west coast port slow down and lower
inventory position.
SIGNIFICANT CUSTOMERS
In 2015 , 2014 and 2013 , Amazon.com accounted for 11.1% , 11.3% and 11.2% , respectively, of our net sales.
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