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’Tis the Season for Lawsuits: Peloton vs Lululemon

’Tis the Season for Lawsuits: Peloton vs Lululemon

Peloton has launched a preemptive attack on Lululemon in the wake of patent infringement accusations. The move comes after Peloton sues competitors iFit and Echelon.

Peloton has sued Lululemon as a strategic countermove to fight accusations of patent infringements. Lululemon, an athletic apparel company, had threatened to sue the interactive fitness company over its new private-label apparel line that launched earlier this fall. The Peloton vs Lululemon lawsuit is added to a growing list — this month, Peloton sued competitors iFit and Echelon, with patent infringement allegations of its own. 

The Peloton vs Lululemon lawsuit, filed in Manhattan federal court on Wednesday, comes as a preemptive attack. Peloton is requesting that the court declare that the company hasn’t infringed on any Lululemon patents and wants the court to state that the allegations are invalid.

Lululemon claims that some of Peloton’s designs infringe on its patents, an accusation that Peloton says lacks merit. The interactive fitness company says the designs are easy to distinguish between the two competitors.

The tension has been mounting between the two leading fitness companies. Peloton’s move to branch out on its own, launching its private-label line earlier this September, ended its co-branding relationship with Lululemon. At the time, the break-up was said to be amicable.

Lululemon seems to have kept a close watch on Peloton’s new apparel line. The athletic apparel company sent a cease and desist letter this month, accusing Peloton of infringing on its patents. In the cease and desist, Lululemon listed five of Peloton’s products, including leggings and a high-neck bra, stating that they are “likely to confuse the relevant public and severely damage Lululemon’s hard-earned reputation, goodwill, and its iconic brand.” Lululemon threatened to take legal action if Peloton didn’t stop selling the listed apparel items.

Peloton believes the allegations are frivolous, noting in its lawsuit vs Lululemon, “On top of the numerous clear and obvious differences in design, Peloton and Lululemon’s brands and logos are also distinctive and well-recognized, making confusion between products a virtual impossibility.”

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It is not surprising that Peloton would make a bold move. Peloton was hopeful that the apparel line would help bolster the company, especially with declining sales of its high-priced equipment. The company has recently implemented an immediate hiring freeze. Leaked audio from a recent company-wide “All Hands” meeting revealed that CEO John Foley said that Peloton had become “undisciplined” and said that the company will go “back to the basics.” An employee divulged that the atmosphere within Peloton has been notably gloomy.  

With light finally starting to appear at the end of the long pandemic tunnel, some home-based fitness companies were starting to see a dip in popularity, as people have been transitioning back to gym studios or taking a hybrid approach. Peloton recently announced that it would be selling $1 billion of shares in a stock offering. The news led to Peloton’s stock surging and helped the company increase cash flow.

However, the hope of seeing post-pandemic light may quickly be dimming with today’s news of an alarming COVID-19 variant. As health officials scramble to contain the new variant, Omicron, and flights are being banned, stocks of Peloton spiked 5%, along with other home-based companies like Zoom and Netflix. 

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