Peloton vs. Lululemon: The ultimate hot yoga pants war
December 19, 2021
4 min read
What's going on here?
Peloton, a pioneer of internet-connected workout bikes, is facing a patent lawsuit filed by another fitness figurehead, Lululemon.
What does this mean?
After Peloton’s launch in September of a clothing brand under the name Peloton Apparel, Luluemon brought forward a lawsuit in federal court with allegations of Peloton wilfully infringing various design patents. This follows the end of the two companies’ five year co-branding relationship. Since 2015, Peloton would buy Lululemon stock wholesale and brand it with their logo, selling it to their dedicated consumers. Peloton notes that this process was burdensome and took roughly a year from purchasing stock to selling to Peloton members.
According to Lululemon, Peloton infringed patents of five women’s bras and leggings products, including Peleton’s One Luxe Tight which Lululemon claims to be a knockoff of one of its all time best sellers, the Align pants. Peloton claims that their own line was in response to the incredible demand for a private label line from their members. It’s clear that both companies capitalised on lockdown trends. On one hand, Lululemon has had a booming online business because despite the closure of physical retail stores, consumers who work from home seek to purchase comfortable clothing whilst also looking put together, which Lululemon provides. On the other hand, homebound customers who cannot get to the gym turned to Peloton over the lockdown period to gain similar fitness benefits from the comfort of their own home.
What's the big picture effect?
Now, as things are relatively less restrictive than last year and market competition has spiked, Lululemon is on the offensive to “safeguard [their] intellectual property” according to a statement put forward by the company. Lulemon’s lawsuit seems rather futile, however, upon noting that they bought the fitness tech company Mirror for $500 million with plans to sell their products in stores. Similar to Peloton, Mirror is an interactive fitness brand. When the Mirror is turned off, it looks like a simple full length mirror. However, when the Mirror is turned on, the LCD screen displays a variety of fitness classes and also allows you to check your form at the same time. Thus, by investing in the brand, Lululemon clearly also wants to take advantage of any gaps in the commercial market and are not content with sitting firmly in the fitness apparel sphere.
For all you IP fanatics, put those seatbelts on because you’re about to be in for a wild ride (well more like a gruelling ride of lawsuit ping pong!). In order to successfully prove that Peloton infringed these patents, Lululemon is now tasked with showing that an average consumer would be confused between the two apparently similar products because Peloton is searching for a court declaration that no infringement has occurred and that Lululemon’s claims are invalid. Peloton has argued that Lululemon’s products are not distinctively unique enough to merit such patent protection but more importantly, that customers of each company would not have any trouble telling the products apart. Indeed, this is quite a strong argument due to how well recognised both companies are in the fitness sphere. When designs become popular in the marketplace, imitation is an ultimate consequence, yet no infringement can be claimed if these imitations do not cause confusion between brands for an average consumer. Here, it is entirely probable that an average consumer would only look towards logos when purchasing fitness gear because many companies advertise very similar products.
Either way, no matter which side you fall on, it is undeniable that this patent war keeps both companies in the limelight as working from home decreases and gyms remain open. Stock market fluctuations are (currently) working in favour of both companies, with Peloton shares increasing by 4% during late morning trading. This, however, may be in response to the new variant and the worry that more people will be forced to stay at home over the Christmas period.
Whilst a partner at Practus LLP acknowledged that the patent issued was for “something quite narrow”, there is a consensus in the background that Lululemon’s separate claim for unfair competition may be successful. This is in light of the fact that Peloton launched their own line, a short while after their “amicable” end to their partnership with Lululemon. Firms will now have to be on higher alert when it comes to advising their clients on their intellectual property, especially because of the complicated nature of patent litigation. The uncertainty of the market due to the ever-changing rules of the pandemic may result in many companies wanting to branch out into other markets or go on the offensive and protect what seems to be niche and ineffectual parts of their so-called intellectual property.
Report written by Rida Ahmed
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