Water Sports Turmoil?

March 19, 2011 | By Kartch More

Water Sports Turmoil?

I received an article from an anonymous source and don’t know quite what to make of it. I will post it in it’s entirety below my own comments. Honestly I had to do some research and educate myself on some of the facts and allegations made in the article and the people mentioned. I want to make clear that I am in no way a lawyer and don’t even play one on TV. I don’t even begin to understand patent law or any other law except for Arizona speeding law (different story altogether). I have little actual knowledge as to what happened and continues to take place in regard to the events described in this article. My research consisted of a few Google searches and of course you can believe anything you read on the internet. (Haha). If you have a take on what was said or can shed a little light on what was stated in the article that would be great.

If anything, it has been a real eye opener for me to see how things are currently structured in the water sports industry. I was even further surprised to see how much of it is controlled by a single parent company and how the “sibling” companies are controlled by members of the Archer family. I’m sure there is debate and support to show this is good or bad. I think in the end it is important to learn the facts and how they relate to whether the industry is moving forward or backwards and how all companies involved conduct business on a day to day basis.

From my experience, business is an interesting creature. At one hand it is perfectly understandable to do anything legally possible to protect and grow your own company. The problem is when that hinders the progression of the market that business is in. I don’t know enough to say whether the water sports industry is in a good or bad spot considering the current structure and environment. I will say I believe the water sports industry is in a precarious situation and it is possible that the industry could lapse into a slump where innovation and growth is set back in a big way unless something changes.

There was a lot of discussion on Wakeworld forums about this topic. It was good to see differing opinions expressed and supported. The article that was sent to me was good in that it prompted me to do my own research into the current situations that are happening and continue to happen in water sports as an industry. I think with knowledge comes power and the ability to formulate an educated opinion. I think positive change and growth in water sports can happen when people understand and get involved. I think with the advent of social media, the face of business as a whole is changing in a positive way. Our goal with Stokemeter is to promote change in business which we feel is characterized by companies and individuals working together to create win-win situations that benefit all parties and grow the industry as a whole. If a market can expand and grow, it is my opinion that a company can maintain its own growth in the process. There are specific ways this can be accomplished by that’s a story for another day.

Here’s some of information I was able to gleam from searching around the internet. Take it all with a grain of salt. I will be contacting Robert Archer and Justin Stephens and will post whatever response I may get. It is important to notice that the author of the article makes many unsubstantiated claims. I would like to see what sources he/she gives for those claims that are stated as fact.

- Kartch

Tony Finn

- Founder of Liquid Force (liquidforce.com/support.html)

- The inventor of wakeboarding. (according to Wade Motawi, employee bio at http://www.liquidforce.com/support.html)

- Inventor of the Skurfer in 1985 (http://kuwaitwakeboardteam.com/s2/page/wakeboard-history)

- Senior Vice President of Liquid Force (http://www.wakeboarder.com/display.phtml?a=316)

Robert M. Archer

- Owner, CEO of Kent Sporting Goods

- Owner, Kent Sporting Goods Company, Inc.

- “The Archer Companies”

- Officer of HO Sports

- Officer of Connelly

- Also known as “Uncle Bob”, or “Bob Archer”

Motion Water Sports, Inc.

- Parent company for Liquid Force, Obrien, Straight Line, Liquid Force Kiteboarding, Liquid Force Maven, Obrien Elite (www.motionwatersports.com)

Kent Sporting Goods CO, Kent Sporting Goods Company, Inc. (http://www.kentwatersports.com)

- Absolute Outdoor, Inc.

Absolute Outdoor, Inc.
Full Throttle
Onyx
ArticShield
X-System

- Connelly

Connelly
CWB
Pro Line Ropes

- HO Sports

HO
Hyperlite
Byerly
Wake Kite
Accurate Lines

- Liquid Force

Liquid Force
Liquid Force Kites
Liquid Force Films
Liquid Force Maven

- O’Brien

O’Brien

Company Wake, Inc.

- Wakeboarding company based out of St. George, Utah.

- Justin Stephens, President

Does anybody know what the relationship is between Motion Water Sports, Inc. and Kent Sporting Goods Company, Inc.?

Timeline:

- June 27, 2006: Motion Water Sports files for patent regarding “Hardware-less wakeboard binding components and assembly and method of making assembly”

United State Patent No. 7,766,711: Hardware-less wakeboard binding component and assembly and method of making assembly.

- Feb 25, 2010: Nalu Kai Incorporated files lawsuit against Motion Water Sports, Inc. for patent infringement (not sure what patent this in regard to)

- Aug 3, 2010: Patent 7,766,711 issued to Motion Water Sports

- Dec 2, 2010: Motion Water Sports files lawsuit against Company Wake, Inc. for patent infringement regarding United States Patent No. 7,766,711

- Dec 2, 2010: Motion Water Sports files lawsuit against Ronix, Inc. for patent infringement regarding United States Patent No. 7,766,711

Article sent to Stokemeter.com from Anonymous Author

Tont Finn and Motion Watersports = The Demise of Wakeboarding Growth

I’ve recently read some disturbing news. I was searching the internet when I noticed that there was a lawsuit from Motion Water Sports (aka, the Archer Companies) against Company Wake for Patent Infringement (see http://www.rfcexpress.com/lawsuit.asp?id=67955). As further investigative work would reveal, Tony Finn filed the lawsuit claiming that Company Wake’s binding system was a patent infringement on their designs. Anyone that has seen the Company Wake Binding System can tell that there is no relation to the binding system Liquid Force or for that fact, any of the Archer companies use. What this lawsuit brought to light though was a pattern that we have seen in the past. One has only to look back to the early 2000′s where similar tactics were used against Hyperlite on a patent lawsuit as well, while under Paul and Herb O’Brien. They spent large amounts of time fighting the allegations, as well as close to a million dollars or so on legal fees only to have the case declared frivolous (A frivolous suit is one without any legal merit). The amount of money spent led to almost certain disaster for Hyperlite’s future until a so called “Knight in shining armor” came to the rescue. This so called knight was the Archer companies and this knight certainly had (and still has) ulterior motives. It seems as though these take over’s have a familiar pattern. First, Finn files these ridiculous lawsuits, and even if bogus the company needs to prove their innocence which leads to overbearing legal fees. Once so much money is used on legal fees, the company then becomes “vulnerable” and that is when the Archer companies gobble them up.

It is this dirty but effective tactic that Finn in particular uses and then convinces Motion Watersports to execute to “eliminate” the competition which has resulted in a mammoth and stifling “conglomerate”. As many industry experts will tell you (or not because of fear of retribution) it is also what is leading to the stagnation of the sport. How you might ask? Let’s delve a little deeper. Suppose that a rider wanted to ride for another company. The options really are few outside of the Archer companies. That means that if the rider wanted to go from let’s say Liquid Force to CWB. Since they are both Motion Watersports companies, they have little bargaining power and the move most likely wouldn’t happen. That’s why there was a breath of fresh air when corporations like Gator, Ronix, Slingshot, Company, and other independent board companies arrived on the scene. Things seem to be looking up for the industry. Well, guess what? Finn and the boys start to file the bogus lawsuits and these independents start to crumble. No big deal right? I wish that was the case. With only one game in town, innovation is stifled, worthy riders that could be sponsored are left in the dust because there can only be the chosen few in the limited amount of board companies. And perhaps the kicker is that there won’t be enough funds to go mainstream. Here is an example. Have you ever wondered why wakeboarding was dropped from the X-Games? Like you, I thought that it was because of the amount of work needed to set up the event. Looking into it further, it was discovered that “The Conglomerate” didn’t want to invest money to highlight it. Pure and simple, instead of growing the business, they wanted to pocket the money. It’s a scarcity mentality that this group has. Instead of realizing that investments in such an avenue as the X-Games would grow the industry and lead to much greater returns on investment and lead to much more money in the pocket, they take the money and run (by the way, the scarcity mentality is also why all the bogus lawsuits are being filed – think of it like a form of short man’s complex).

Okay, let’s get back to the lawsuits, is Company the only one? Nope. There are things coming up against Ronix and I have heard Slingshot as well. I’ve even heard that the Company crew was willing to cooperate with them on a royalty agreement as long as they could prove to them that they were in violation outside of court, but instead Finn and MotionWatersports went ahead and filed the lawsuit anyways. C’mon Tony and Bob, is this really how you want to build your legacy? Don’t you know that we know that your top design guys, film guys, and riders left because you were giving them the short end of the stick? Don’t you know that people know that Watson left you guys to be a Company rider, but then you lured him back with money and now have reneged on the money you promised stating that it was because of the economy? Don’t you know that many vendors are stocking your product out of “adverse selection” meaning that they only choose you because there is no other game in town? Don’t you know that retailers are sick and tired of your strong arm tactics in which you threaten not to give product if the retailer stocks your competitor’s products (i.e. live vests and clothing other than Liquid Force or Archer related product?). Don’t you know that industry leaders and a large number of the public know that you pull antics that are killing the business? You think I’m joking on that one? Well, here’s one of many similar examples. There is a major wakeboard and water sports retailer (there are actually a number of them that I know of). Because of the economy, the Archer Companies (most especially Tony Finn and LF) wouldn’t send this retailer any product, as they were behind in payments (which is somewhat understandable) which was especially damning because it would be the sales of the new product that would let the retailer pay off what they owed in the first place. This retailer was never late on payments before and would assuredly be able to pay off what they owed. Still, this retailer wouldn’t see any Hyperlite, Liquid Force, or other Archer product. However, Ronix and Company shipped them their product to sell. The Ronix and Company product was sold in such frequency that it led not only to paying back both Ronix and Company, but all of the Archer debts as well. Of course, now for 2011, the Archer Companies are coming back to this retailer for more orders. The fact is, with this scarcity mentality that Finn and the boys have, the so called elimination of rivals is ultimately leading to their own demise. But it doesn’t stop there. See, there are those vendors that you have said would be your exclusive dealers, and then they find out that you all have been double dipping. You are sending product to their competitors, the ones that you said you would not do so until a certain time was past. But hey, it’s not really the people that could grow your sport you care about; it’s about the money that goes in your pocket. Looks like your legacy is going to be similar to that of Enron and AIG. We (and I say we because there are many of us) feel sorry for you.

(Author Unknown) – Sent to Stokemeter.com

Tags: archer, bob, Bob Archer, company wake, gary kartchner, kartch, Kent Water Sports, lawsuit, maurice matsumori, Motion Water Sports, robert, sports, stokemeter, stokemeter.com, tony, Tony Finn, turmoil, water