finance

Peloton sues Lululemon in dispute over new apparel line



© Reuters. FILE PHOTO: A Peloton exercise bike is seen after the ringing of the opening bell for the company’s IPO at the Nasdaq Market site in New York City, New York, U.S., September 26, 2019. REUTERS/Shannon Stapleton/File Photo

By Jonathan Stempel

NEW YORK (Reuters) – Peloton (NASDAQ:) Interactive Inc, the exercise bike company, has sued Lululemon Athletica (NASDAQ:) Inc after the athletic apparel maker threatened its own lawsuit over Peloton’s new apparel line.

The lawsuit was filed in Manhattan federal court on Wednesday night, 2-1/2 months after Peloton launched https://www.onepeloton.com/press/articles/peloton-apparel-launch its apparel brand following the end of its five-year co-branding relationship with Lululemon, a break Peloton called amicable.

Peloton said Lululemon’s claims that five of its women’s bra and legging products – Strappy Bra, High Neck Bra, Cadent Peak Bra, Cadent Laser Dot Bra and Cadent Laser Dot Leggings – infringed six Lululemon design patents “lack any merit.”

The apparel line could help New York-based Peloton rely less on its bikes and treadmills, after sales growth slowed https://www.reuters.com/business/peloton-plunges-loss-bike-price-cut-higher-costs-2021-11-04 because more people received COVID-19 vaccines and stayed home less.

In a Nov. 11 letter, Lululemon’s lawyer said the Vancouver, British Columbia-based company would sue Peloton unless it stopped selling its new apparel.

But Peloton said its products and Lululemon’s designs are easy to tell apart, and Lululemon’s designs are too “obvious” to deserve patent protection.

“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,” Peloton said.

Peloton wants a court declaration that it has not infringed Lululemon patents and trade dress, and that Lululemon’s patent claims are invalid.

“At Lululemon we are known for our product innovation and iconic design,” Lululemon said in a statement on Friday. “We will defend our proprietary rights, to protect the integrity of our brand, and to safeguard our intellectual property.”

In late morning trading, Peloton shares were up $1.76, or 4%, at $45.68, as investors worried that a new coronavirus variant would spread, and keep more people at home longer.

The case is Peloton Interactive Inc v Lululemon Athletica Canada Inc, U.S. District Court, Southern District of New York, No. 21-10071.

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