Mega Fitness Brands Limber Up for Legal Battle
Fitness behemoths Peloton and Lululemon are lawyering up against each other over design patent (or otherwise known in Canada, as industrial design) infringement. Below is a summary of the facts of the cases, as presented in each of their pleadings, which is a recitation of each party’s position, as opposed to proven facts. Nothing at this point is conclusive and we are in the early stages of this case. Evidence has not been filed and we are far from a conclusive judgment. At this point, what we can glean from this matter as a takeaway is the importance of proactively and strategically protecting your company’s intellectual property, amassing an intellectual property portfolio, negotiating lock tight written agreements with third parties and enforcing your intellectual property rights.
The Background
In 2016, Peloton partnered with Lululemon, whereby Lululemon supplied Peloton with athletic apparel. The apparel was co-branded by both Lululemon and Peloton whereby both of their trademarks were affixed to the apparel. The apparel was sold through Peloton’s retail outlets, showrooms and e-commerce platforms. In 2021, Peloton requested that the business relationship with Lululemon be terminated. Shortly thereafter, Peloton announced that it was going to launch its own product line.
The Demand Letter
Concerned that Peloton’s independent apparel line copied many aspects of Lululemon’s design patent protected garments, Lululemon issued Peloton a letter on November 11, 2021 demanding that Peloton immediately cease from selling the alleged infringing apparel. Peloton allegedly requested more time to respond to Lululemon’s demand letter, to which Lululemon agreed. However, instead of providing a substantive response to Lululemon’s demand letter, Peloton instead filed a Declaratory Judgment action against Lululemon in the Southern District of New York (summarized below). Lululemon then filed its action against Peloton in its chose forum, the Central District of California (also summarized below).
Peloton’s Case Against Lululemon
Seemingly wanting to nip Lululemon’s demand letter in the butt, Peloton filed a complaint for declaratory judgment against Lululemon. Peloton, despite being incorporated in Delaware, chose to file its pleading against Lululemon in the Southern District of New York. Peloton asserts that it had been selling apparel since 2014 but launched its private label line in September 2021. Peloton asserts that the decision to end the co-branding relationship with Lululemon was amicable. Peloton alleges that prior to issuing the demand letter, Lululemon had not raised the issue of patent design infringement with Peloton. Peloton’s position is that Lululemon’s demand letter was meritless in that there was no infringement, the products could be easily distinguished and there was no likelihood of confusion in the marketplace. As such, Peloton is seeking a declaration from the court that its products do not infringe those of Lululemon. Going a step further, Peloton requested the court to declare that Lululemon’s design patents be invalidated.
Lululemon’s Case Against Peloton
On November 29, 2021, Lululemon filed its complaint against Peloton in California, claiming patent infringement, trade dress, false designation of origin, passing off and unfair competition. Lululemon, despite being a Canadian company, chose to launch its claim against Peloton in California because, it alleges, Peloton owns several retail locations in California and its retail presence is most concentrated in California. Lululemon asserts that it invests heavily into product innovation and design, thereby accumulating an intellectual property portfolio that includes design patent issued in the USA for sports bras, leggings and pants. Moreover, Lululemon asserts that the apparel also includes distinctive elements that should be protected as trade dress. Peloton’s incorporation of these significant proprietary design elements constitutes patent and trade dress infringement. Moreover, Lululemon’s assertion is that Peloton’s sale of the alleged infringing products creates a false and misleading representation, whereby there is a false association with Lululemon. In addition, Lululemon also asserts that Peloton will gain profits and competitive market advantages based on their practice of unfair competition at Lululemon’s expense. Lululemon is seeking an order declaring that Peloton has willfully infringed Lululemon’s design patents, an injunction against making, selling, importing or offering to sell the infringing apparel, monetary damages.