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07 March 2021

  • Updated tariff timeline: How we got here
    UPDATED Sept. 11, 2019

    BOULDER, Colo. (BRAIN) — Tariff news is piling up on the industry, making heads swirl from Washington to Long Beach to Boulder.

    To help you, and us, keep track, we have prepared a timeline, below. We'll have to keep updating the timeline as things develop. If you have a question, shoot it over to BRAIN’s Steve Frothingham at Sfrothingham@bicycleretailer.com or leave a comment.

    Pre-existing tariffs

    During the Kennedy administration the import duty on bikes was 30%. But in recent years most complete bikes have been subject to an 11% tariff; the rate for most road bikes is half that. Before the new Section 301 tariff imposed last year (see below), e-bikes had no tariff.

    Parts and accessories are generally subject to tariffs between 0-10%. The tariff on pedals, for example, is 8%, while that on pumps is 3.7%. 

    All the new and proposed tariffs in the news in the last year are in addition to the pre-existing tariffs. So for example the new 25% tariff on Chinese bikes, made official this month, is on top of the 11% tariff most bikes already are subject to, for a total of 36%.

    Many missed the news in September 2018, but there was a tariff reduction that month. President Donald Trump signed the Miscellaneous Tariff Bill Act of 2018, which reduced some of these underlying tariffs (in imports from all countries, not just China) without affecting the new Section 301 or Section 232 tariffs. For example, the bill lowered the rate on disc brakes from 10% to 7.5%, and the rate for unicycles went from 3.7% to 0%. It also slightly reduced the tariffs on some cycling shoes. 

    New and proposed tariffs, in chronological order:


    The U.S. tariff on steel and aluminum

    Applies to: U.S. imports of raw steel and aluminum from most countries
    Rate: 25% on steel, 10% aluminum
    Date proposed: March 8, 2018
    Date applied: March 23, 2018
    Type of tariff: Section 232, related to national security. (There's more on Section 232 tariffs on the Department of Commerce site)

    Annual import value of products, 2018: $40 billion
    Notable exclusions: Steel from Argentina, Australia, Brazil, and South Korea (Argentina, Brazil and South Korea are limited by import quotas); aluminum from Argentina and Australia (Argentina limited by quota). Under NAFTA, Canadian and Mexican materials were exempt until May 31, 2018.
    Impact on our industry: Many U.S. manufacturers tell BRAIN that material costs — even for U.S. made steel and aluminum - have increased significantly. This put them at a disadvantage relative to foreign manufacturers, because only the materials, not completed products, are subject to this tariff. Some U.S. manufacturers favored an increase in tariffs on completed products because it helped reduce that disparity. 
    Status: Mexico and Canada continue to negotiate new trade agreements in hopes of eliminating the tariffs; with a Canada/US deal announced on May 17. The EU and the U.S. also continue to negotiate on this and other trade issues.
    Retaliation: Canada, Mexico, and the European Union each enacted retaliatory measures.

    Section 301, List 1 (GPS and bearings)

    Applies to: U.S. imports of a wide array of Chinese products, including GPS bike computers and ball bearings
    Rate: 25%
    Previous tariffs: GPS: 0%; Bearings: 4-10% depending on type.
    Date proposed: April 6, 2018
    Date enacted: July 6, 2018
    Type of tariff: Section 301 (More on Section 301 on the USTR website)
    Annual import value of all List 1 products, 2018: List 1 represented $34 billion in imports, out of an original proposal of $50 billion. List 2 (below) made up the $16 billion difference.

    Impact on our industry: Caused some GPS makers to move production out of China, usually to Taiwan. Raised costs of U.S.-made components that include Chinese-made bearings, and replacement bearings. Caused some bearing suppliers to move production or assembly out of China.
    Retaliation: China announced its own list of U.S. goods subject to new tariffs.
    Status: Still in place.

    Section 301, List 2 (Chinese e-bikes and motors)

    Applies to: An array of Chinese products, including e-bikes and e-bike motors.
    Tariff rate: 25%
    Previous tariff on e-bikes: 0%
    Type of tariff: Section 301
    Annual import value of all List 2 products, 2018: $16 billion
    Date proposed: June 20, 2018
    Date applied: Aug. 23, 2018

    Impact on our industry: Several manufacturers, including Trek and Pedego, testified against the proposal in Washington. The tariff had more effect on lower-priced e-bikes sold online and other channels. Sales statistics show the e-bike remained the fastest growing segment in the industry, despite the tariffs.
    Retaliation: China announced a second round of U.S. goods subject to retaliatory tariffs.
    Status: Still in place. Bike trade groups and brands requested exemptions, but the USTR denied those requests in January.

    Section 301, List 3 (Chinese bikes, parts and accessories)

    Applies to: Wide array of Chinese products, including most complete bikes and bike parts and accessories, plus other items the bike industry uses and sells, like tools and water bottles. 
    Notable exceptions: Helmets and lights were exempted for safety reasons. Cycling apparel and shoes also are not included. A variety of bike parts and accessories that are not elsewhere specified or included in the HTS import codes (NESOI, in importer jargon) fall under the 8714.99.8000 code. That code was NOT included in this round, but items under that code are subject to a pre-existing 10% duty. This includes about 40 types of products, including pump clips, bike radios and horns, kickstands, wide-angle reflectors, seatposts, toe clips, spoke reflectors and more. HTS 8714.99.8000 is included in List 4 (see below).
    Tariff rate: 10% starting September 2018, was set to increase to 25% on Jan. 1, 2019, but the increase was delayed. Now set to increase to 25% on imports that arrive after June 1.
    Previous tariffs: The 10% and 25% tariffs are in addition to existing tariffs on bike products, discussed above.
    Type of tariff: Section 301
    Annual import value of all products on List 3, 2018: $200 billion.
    Date proposed: July 17, 2018
    Date applied: 10% took effect Sept. 24, 2018. It increased to 25% on May 10, 2019, applying to imports that arrive after June 1.

    Despite the notable exceptions, this is a big, wide ranging list of bike stuff.

    Impact on our industry: Despite the notable exceptions mentioned above, this is a big, wide ranging list of bike stuff. Evidence: In 2018 the bike industry imported at least $1.1 billion in products on this list from China, representing half the industry’s imports. Since September, the 10% tariff has led to wholesale price increases of around 5% on these products, retailers said. Suppliers tell us efforts to re-source products and the uncertainty has been costly. The increase to 25% is expected to cause significant wholesale and retail price increases.
    Retaliation: China is running out of U.S. imports to hit with new tariffs in response. After the U.S.’s 10% increase in September, China announced new tariffs of 5-10% on $60 billion in U.S. exports to the country, including agriculture products and natural gas. After the announced increase to 25% in May, China said it would increase tariffs on $60 billion in other U.S. imports on June 1.
    Status: Negotiations continue.

    Section 301, List 4 — (Almost everything else from China)

    Applies to: U.S. imports of Chinese goods, including most or all of the bike products not included in List 2 or List 3.
    Tariff rate: up to 25%
    Type of tariff: Section 301
    Annual import value of all products on List 4, 2018: $300 billion.
    Date proposed: May 13, 2019
    Date to be enacted: Any time after June 24 in any amount up to 25%, on top of the regular rate of duty.

    Impact on our industry: Adds in most or all bike-related items that were not in List 3, including lights, helmets, unspecified parts and accessories, apparel and footwear. The industry is planning to submit requests to exclude bicycle products from this round of tariffs.

    Status: A public hearing was held June 17 at which the bicycle industry was represented. On June 29, at the G20 summit in Japan, Trump said he and Chinese President Xi had agreed to a truce and that the U.S. would not impose the new tariff on List 4. On August 1, Trump said Xi had not followed through in promises made in June and said List 4 would be hit with a 10% tariff on Sept. 1

    Status update Aug. 13, 2019: Trump announced that some products on List 4 will get a holiday shopping season reprieve and not get hit with the new tariff until Dec. 15. That included cell phones, laptops — and balance bikes. However, all other bike products on List 4 were set to still receive the 10% tariff on Sept. 1. That included helmets and lights, which were exempt from previous rounds for safety reasons. 

    Status update Aug. 30, 2019: The USTR announced the new tariff on List 4 would be 15%, not 10%, after China announced retaliatory measures. The 15% would be imposed on List 4a on Sept. 1 and List 4b on Dec. 15. The USTR also said the 25% tariff on Lists 1,2, and 3 would increase to 30% on Oct. 1, 2019.

    Status update Sept. 11, 2019: Trump tweeted that the increase on Oct. 1 would be delayed until Oct. 15 as a good will gesture.  

    Section 301, EU list

    Applies to: U.S. imports of products from the European Union, including some bike products.
    Tariff rate: Up to 100%
    Type of tariff: Section 301
    Annual import value of all products, 2018: $11.5 billion
    Date proposed: April 8, 2019
    Public hearing: May 15-16, 2019

    Impact on our industry: Applies to imports of EU parts, including sprockets and hubs.
    Retaliation: The EU has proposed retaliation that would include some sprockets and hubs from the U.S.
    Status: Matt Moore, representing the BPSA, was scheduled to speak at a public hearing about this proposal on Thursday, May 16. Comments were being accepted until May 28 at regulations.gov/docket?D=USTR-2019-0003.

    Editor's note: We've corrected our reference to the import duty on bikes during the Kennedy administration. The correct figure is 30%, not 50% as we had said. Thanks to James Longhurst, Ph.D., an associate professor in the history department at the University of Wisconsin La Crosse for nicely pointing out our mistake. 

     

  • PeopleForBikes' Ride Spot lends support to Black History Bike Ride challenge

    AUSTIN, Texas (BRAIN) — Route-finding app Ride Spot has teamed with Black History Bike Ride to raise money and create more routes and expand the city bike tour.

    If 500 riders complete the self-guided 8.9-mile Austin OG Route through the Ride Spot app by March 31, SRAM will donate an undisclosed amount to the Black History Bike Ride project to improve the route and aid in expansion and creation of other similar routes in the city.

    Developed as a route-finding and storytelling platform, Ride Spot was created by PeopleForBikes to help break down the barriers to bicycling.

    Talib Abdullahi started Black History Bike Ride last year to educate friends about Austin Black history with a ride around the city. After being shared on Instagram, the ride attracted more than 400 riders in June.

    That was the only Black History Bike Ride in 2020, but the interest remained for it to continue. So Abdullahi created the website and self-guided OG Route — including information and links — allowing anyone to complete it on their own time.

    "Local history isn't really discussed in elementary or middle schools," Abdullahi said. "I created the ride to give people the tools to learn the history themselves and to understand their own city a little better. My hope is to inspire more people to get out in their own communities and learn about the Black, Latino and Indigineous stories that exist all around them."

    The challenge is free with every completed ride getting Black History Bike Ride closer to its goal, but cyclists need to download the Ride Spot app. After downloading, tap "Join" on the Black History Bike Ride Challenge.

    "We're so excited to partner with Talib and the Black History Bike Ride," said Ride Spot's Tobie DePauw. "Not only will the ride help Austinites learn about Black history in their city, it will help support the creation of more historical and educational rides in other cities across the U.S. Rides like this are what Ride Spot is all about."

  • Huffy adds sponsorship to Camping World Series racing team

    BRISTOL, Tenn. (BRAIN) — Huffy Corp. announced it also will sponsor NASCAR driver Chase Briscoe's No. 04 Roper truck in this year's Camping World Truck Series. It comes after Huffy agreed to sponsor Briscoe's No. 14 Stewart-Haas NASCAR Ford.

    Huffy is part of the Alpha-Bravo sponsorship with TexACon Cut Stone, which is a longtime Briscoe partner. The logo will be displayed on the quarter-panel at the March 27 truck race and the next day in the NASCAR race, both in Bristol.

    The sponsorship began last year in the virtual racing league iRacing and moved to on-the-track competition for 2021. Briscoe also has access to a Huffy Everett e-bike in the pits.

    Briscoe previously drove the No. 98 Ford in the NASCAR Xfinity Series, winning his ninth Xfinity race of 2020 at Kansas Speedway. That gave him 11 career Xfinity victories overall.

    Huffy is part of Covation Holdings Limited, which also includes Royce Union, Niner, Batch, Buzz E-Bikes, and Vaast.

  • Manhattan bike rental business sues landlord, alleging extortion and predatory leasing

    NEW YORK (BRAIN) — Tour Central Park, which operates a bike rental operation in the city, is suing the landlord at its former Lower Manhattan location, charging that it engaged in "extortionate and predatory leasing practices," among other things.

    Tour Central Park operates out of several locations in the city and is part of the BikeRent.NYC group, which is the official bike rental company of the city's parks.

    According to the suit filed this week in the NY Supreme Court in Manhattan, in 2015 the rental company entered a five-year lease for a first-floor location at 145 Nassau Street, off Park Row in Lower Manhattan, across from City Hall Park.

    The suit says that in 2018 the landlord, Thor 38 Park Row LLC, threatened to lease its current space to a bike rental competitor unless it agreed to a 100% increase in its monthly rent, from $5,500 a month to $11,000 per month. Tour Central Park said it agreed to the rent increase, but that Thor then leased another space in the same building to the competitor, Unlimited Biking.

    When the lease expired in January 2020, Tour Central Park said it told the landlord it would vacate the spot but that the landlord offered a month-to-month lease at $8,000 per month to entice them to stay. Tour Central Park did that for two months and then left the building in March. According to the suit the landlord then offered to hold the space for three months rent-free and would reduce the rent if the company came back. The company did not come back but said it started receiving rent bills in September 2020. In January 2021 the rental company requested its $30,000 security deposit back, but the landlord said it was keeping the deposit to apply to the rent during the period when the space was being held.

    Tour Central Park is accusing Thor 38 Park Row of fraud, breach of contract, and breach of covenant of good faith. It's asking for its $30,000 deposit back plus legal fees and interest.

  • VIDEO: From car-country native to cycling enthusiast, Buttigieg promises a bike-friendly DOT
    UPDATED with the full video of Buttigieg's remarks and interview at the National Bike Summit.

    WASHINGTON (BRAIN) — Pete Buttigieg was born in "car country," so the Indiana native would seem to have the perfect background to be U.S. Transportation secretary. But as he made abundantly clear Wednesday addressing the annual League of American Bicyclists National Bike Summit, he's been born again as a bike enthusiast.

    "I come from an auto-making part of the country, and we're proud of it," said Buttigieg, who made a short opening statement during the virtual event before taking questions from League Director Bill Nesper. "But we can definitely be more of a bicycling country."

    The four-day virtual event that began Sunday and ended Wednesday brought together advocates around a shared goal of building a bike-friendly country. Buttigieg knows a little about that, even though he didn't propose any specific intiatives Wednesday.

    In 2018, when he was mayor of his hometown South Bend, Indiana, the League awarded his city with the Silver Level Bike Friendly Community designation. It was also recognized for the efforts to make the city more environmentally friendly. Buttigieg noted then that South Bend had nearly 2% of its community members commuting by bicycle daily when its population was a little more than 100,000 people.

    "If you just get to a certain tipping point, and it's not much — about 2% in terms of the rate of people who commute to work by bike — you tend to see step changes in terms of safety probably because motorists are more conscious and aware of people on bicycles as a matter of routine," Buttigieg said Wednesday. "So it's just building up that culture of cycling."

    Assuming office on Feb. 3, Buttigieg said beyond anything he or his office can do, it starts with local policymakers.

    "I can help, but the more bottom-up it is the better," he said. "What I can say is that whether it's hard resources or whether it's moral support, you're going to see a lot of energy coming from my office and my team to help move things along. We're going to be a better safer, cleaner, and greener country the more people have safe options to get around on two wheels."

    South Bend's transformation

    Making South Bend more bicycle-friendly was part of Buttigieg's plan as mayor to transform the downtown during his two-term mayoral stint. His "Smart Streets" initiative turned one-way streets into two-way, with reduced speed limits, and narrowed driving lanes. the city planted trees and laid decorative brick pavers. Supporters said the pedestrian-friendly changes were responsible for more than $100 million in private investment with new hotels, apartments and restaurants. Buttigieg said a big part of the city's economic turnaround occurred in underinvested corridors and in the urban core.

    With bicycling amid a boom that began a year ago, Buttigieg said the groundwork laid by advocacy groups like the League to help get more protected bike lanes, bike parking, and bike share played a huge role.

    He said a turning point for him was a 2014 trip to three cities best known for biking: Copenhagen, Amsterdam, and Oslo. He was accompanied by then-DOT Secretary Anthony Fox and two other mayors.

    "We came back from that really inspired," Buttigieg said. "How great infrastructure and bike culture and conscious and intentional choices in countries that used to be as car-dependent as we are in many ways can keep people moving through winters that were at least as cold as we had in South Bend.... We knew we could do more back at home. We were very proud a couple years later when the League named us as one of the most bike-friendly communities in our area."

    Good bike policy makes good sense

    Making a small Midwest town with a conservative tilt bike friendly took some doing, Buttigieg said, but it came down to common sense and common good for all.

    "Part of what we set out to do is demonstrate that smaller communities, Midwestern communities, communities in more politically conservative areas, had just as much to benefit from good bike policy as anywhere else. So we really presented it as a quality-of-life issue. That better access to biking and walking was fundamental to quality of life in South Bend. As we pursued that, we knew there was a lot of convincing to do. But it was part of how we were opening up a process that everyone could participate in: create a city that brought everybody to the table and explain why it's good for residents; it's good for businesses."

    And that also meant attracting and retaining younger residents "who have an expectation of getting around without having to jump into a car and drag 2 tons of metal with them anytime they're going anywhere. The community outreach was very important. Talking to local government leaders, talking to interest groups, talking to residents, and of course the role advocates played was really important."

    One of the first things Buttigieg did after taking office was to extend the public comment period through May 14 on the 11th edition of the Manual on Uniform Traffic Control Devices for Streets and Highways. It's due for a comprehensive update after more than a decade and sets national standards on traffic signs, signals, markings on all U.S. roads open to public travel, playing a role in safety.

    And safe commuting remains a concern, with Nesper telling Buttigieg that cycling and pedestrian deaths have continued to rise in the past decade, with people of color especially affected. Buttigieg acknowledged there's much work that needs to be done.

    "It's distressing to see backsliding on this," said Buttigieg, who identified highway design to reduce speeds and developing a bike culture as two areas needing immediate attention.

    "It's true that faster is not always better, especially the roads that go through the hearts of our communities. How do we make it easier to make the right choice?"

  • Canyon warns about its new aero road bikes after handlebar break in Belgian race

    By Ben Delaney

    (VELONEWS) — German bike brand Canyon has asked owners of its new Aeroad CF SLX and CFR aero road bikes to stop riding them following Tuesday's incident at the Le Samyn race, when a portion of Mathieu van der Poel's handlebar broke and fell off during the race.

    Canyon-sponsored teams have discontinued riding and racing the Aeroad as well.

    Van der Poel had not crashed during the race, so there was no obvious immediate cause to the failure.

    The bar break was particularly notable because of the handlebar design of the bike: The new Aeroad CF SLX features a multi-part carbon bar that can adjust for width. There are two bolts on either side of the bar that, when removed, allow for the bar to be widened or narrowed.

    Further, the ends of the bars can be pulled fully out for travel, allowing the hood and drop portion to hang down loosely.

    When many race fans saw the portion of the broken bar dangling, they assumed that it was this width-adjustable portion that had failed.

    In fact, the bar was broken near where the shifter clamps onto the bar.

    Canyon did not comment in a detailed manner on the failure, beyond issuing a statement that said the brand "immediately began analysis and testing to understand the cause of this incident."

    "Mathieu fortunately did not fall. We want to ensure with absolute certainty that no one comes to harm before we have fully understood the root cause," Canyon founder Roman Arnold said in a statement.

    To that end, Canyon is therefore asking all Aeroad customers to stop riding their bikes for the time being.

    More on our sister site, VeloNews.

  • Court dismisses lawsuit against micromobility data-sharing

    PASADENA, Calif. (BRAIN) — A federal judge dismissed a case last week against the Los Angeles Department of Transportation about its collection of real-time data on micromobility users.

    The American Civil Liberties Union, representing a group of plaintiffs, sued over the LADOT requiring e-scooter companies to provide real-time data to the city. The LADOT said the information is critical for mobility oversight, including ensuring equitable access of micromobility. U.S. District Judge Dolly M. Gee dismissed the ACLU case in the Central District of California court on Feb. 23.

    Gee wrote in her dismissal that she understood the concern “with the unprecedented breadth and scope of defendants’ location data collection. But that alone does not mean it violates their constitutional or statutory privacy rights. This is an issue that may be more appropriately addressed as a matter of public policy, which is not for this court to opine.”

    It follows Uber Technologies’ lawsuit against LADOT over the same concern about the sharing of real-time location data of its JUMP e-bike and scooter riders. However, Uber announced in June it withdrew the lawsuit because Lime acquired its bike and scooter share business in May. Uber reiterated at the time that “mass collection of precise geolocation data by government agencies deeply compromises consumer privacy, and we applaud the growing number of organizations” opposing this.

    Filed last March in the same court as the ACLU suit, Uber said the LADOT unlawfully implemented Mobility Data Specification, allowing the city access to coordinates of share-riders in real time. Officially, Social Bicycles was the plaintiff in the Uber lawsuit. Social Bicycles operated JUMP, and Uber acquired Social Bicycles in 2018. 

  • Buttigieg to speak at LAB's virtual National Bike Summit on Wednesday

    WASHINGTON (BRAIN) — Transportation Secretary Pete Buttigieg will address the League of American Bicyclists' annual National Bike Summit on Wednesday. The four-day summit is being held virtually this year. 

    More than 1,000 bike advocates are expected to participate in the summit. 

    "The League knows communities are stronger, people are happier, and life is better for everyone when more people can safely and easily choose to go places by bike," said Bill Nesper, the League's executive director. "Based on his work overseeing the transformation of South Bend into a Bicycle Friendly Community, we're excited to have a Secretary of Transportation in Pete Buttigieg, who also knows the benefits of bicycling and we can't wait to discuss his vision for the future of our transportation system at the National Bike Summit."

    Buttigieg will speak at noon ET Wednesday. Following his remarks he will participate in a sit-down discussion with Nesper.

    Sen. Tom Carper, D-Del., and Rep. Peter DeFazio, D-Ore., were scheduled to speak at the virtual event on Monday. Carper, chairman of the Senate Environment & Public Works Committee, has pledged to draft a bill that will go further than the Senate's 2019 version of the transportation bill in addressing climate change, safety and innovation. DeFazio, chairman of the House Transportation & Infrastructure Committee, has promised a "transformative" transportation bill, the League said.

    "Having these three national transportation leaders joining us at the Summit is a powerful recognition of the millions of American who bike to run errands, to head to work, or as a part being active, and of the hundreds of thousands of advocates in our movement to build better places for people to bike, whether for fun or to everyday destinations," said Nesper.

    Other policymakers speaking at the National Bike Summit include Rep. Earl Blumenauer, D-Ore., who is the co-chair of the Congressional Bike Caucus, Rep. Ayanna Pressley, D-Mass., who co-chairs the Future of Transportation Caucus, and Rep. Adriano Espaillat, D-N.Y., a member of the House Transportation & Infrastructure Committee.

    More information on the summit at bikeleague.org/summit.

  • Lime invests $50 million in its e-bike micromobility service

    SAN FRANCISCO (BRAIN) — Ride-share company Lime announced a $50 million investment in e-bikes that includes upgraded hardware and plans to expand service to 25 more cities this year.

    In addition expanding to new locations, primarily in Europe and North America, Lime also will add a new e-bike model this summer. The investment comes after Lime achieved its first full quarter of profitability in 2020. In May 2020, Lime acquired Uber's JUMP bike-share line of e-bikes and e-scooters.

    "As we build out the Lime platform to serve any trip under five miles, e-bikes are a key piece of the puzzle, providing a perfect option for medium-length trips," said Lime CEO Wayne Ting. "That's why we're making substantial investments to upgrade our world-class e-bike and bring it to more cities across the globe, giving riders a new and exciting way to leave the car behind. Shared micromobility is playing an essential role in getting cities moving again safely so we see this as a critical moment to double down on e-bikes as an open-air, socially-distanced transportation option."

    The new e-bike model will feature an interchangeable battery that can be switched out with Lime's Gen4 e-scooter. Lime said the interchangeable battery will streamline operations across its line and reduce charging frequency, resulting in more fully charged vehicles.

    Other features include:

    • More powerful motor.
    • A phone holder, allowing riders to navigate and follow directions without having to stop.
    • A new handlebar display that aligns with Lime's scooters for a standardized display across vehicle types.
    • An automatic two-speed transmission that eliminates the previous generation's gears.

    Lime also announced a partnership with the League of American Bicyclists. The partnership includes an education campaign for Lime riders on safe bike and scooter riding via a safety quiz tailored to individual cities and universities. Lime also will work with the league to leverage local bicycle clubs and its riders to advocate for federal, state, and local funding and action to create safer streets for micromobility.

  • Fox wins critical round in long-running patent fight with SRAM

    WASHINGTON (BRAIN) — A U.S. Patent and Trademark Office board has sided with Fox Factory and invalidated parts of a key SRAM patent on its X-Sync wide-narrow chainrings. The board's decision could lead to a resolution of several long-running patent-related suits between SRAM and Fox.

    The dispute dates to 2015, when SRAM sued RaceFace (which Fox had acquired in 2014) for infringing on two of its chainring patents. Several other brands offering similar chainrings had agreed to license the X-Sync technology from SRAM, but RaceFace took it to court.

    Separately, in 2016 Fox sued SRAM, which owns RockShox, for infringing on several Fox-owned suspension patents. That case, to be heard in Colorado, appears to be on hold because of COVID-19 restrictions on civil trials. Fox and SRAM, via their various brands, are competitors for OE spec in drivetrain, suspension, wheels and cockpit components. 

    In 2017 the chainring suit, which was filed in Illinois, was essentially put on hold while Fox asked the U.S. Patent Trial and Appeal Board to review two patents, a process that is often lengthy and expensive. 

    The litigation has cost both companies millions in legal fees. In its most recent quarterly and full-year results, released Thursday, Fox Factory noted it spent $1.96 million in patent-related litigation in 2020, down from $4.4 million the year before. The reduction may have been a result of the COVID-19 delays and the pending patent review.

    The board upheld the patents in 2018. Although it agreed with Fox that SRAM's patent claims combined features shown in prior art, including some unpatented Shimano technology from the 1980s, the board said secondary considerations suggested the technology was far from obvious — and therefore patentable. Those secondary considerations included evidence that the chainrings sold well, were praised by the industry and media, appeared to fulfill a long unmet need, and were being licensed or copied by competitors.

    Fox appealed the board's decisions on both patents to the Court of Appeals for the Federal Circuit. In December 2019 the appeals court sided with Fox on one patent (#9,182,027), sending it back to the review board to reconsider. In June 2020, the appeals court upheld the board's decision on the other patent (#9,182,025) Fox had challenged. 

    The latest decision by the board, announced Thursday, involves the so-called '027 patent that the appeals court ordered the board to review. On its second look in light of the appeals court ruling, the board invalidated SRAM's patent claims that Fox had challenged.

    The patent claims specifically relate to the combination of two separate chain-retaining features: alternating wide-narrow teeth and teeth that are offset to the left (or "inboard"). Both features may have been seen before, but SRAM claimed that combining them constituted a new invention. In its decision, the board noted that it wasn't clear that those combined features were related to the secondary considerations it had cited in its 2018 decision. For example, while SRAM showed that competitors were copying and licensing its X-Sync chainrings, the board said it wasn't clear that they were specifically copying the combined wide-narrow/inboard-offset claims in the patent. The board ruling noted that some of SRAM's X-Sync licensing agreements — which were presented as evidence of secondary considerations — did not specifically cite the patent in dispute. 

    Reached on Friday, representatives from SRAM and Fox Factory said they would have no comment. 

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