- Months after launching its own apparel line, fitness machine maker Peloton has sued Lululemon to preempt a patent infringement lawsuit. Peloton is seeking a court declaration that its products don't infringe on Lululemon's patents.
- In its complaint, Peloton said it and Lululemon had amicably shelved an agreement around co-branded apparel. But then in November, an attorney for Lululemon sent the cycle maker a cease-and-desist letter alleging several Peloton products infringed on the apparel brand's design patents.
- In an emailed statement, a Lululemon spokesperson said, "We will defend our proprietary rights, to protect the integrity of our brand, and to safeguard our intellectual property."
Peloton came out with its own apparel line in September, but the company has sold apparel since 2014 through partnerships in order to meet demand from the fitness company's members.
"Building on its success and expertise in the fitness industry, Peloton recognized a consumer appetite for products featuring the Peloton brand," the company said in its complaint.
Peloton forged relationships with apparel makers and would incorporate its own logo onto products it sold to members. In 2016, it struck up a partnership with the athleisure giant Lululemon. The two make a fairly obvious match, with one an apparel maker that prides itself on quality and functionality in fitness contexts, the other a high-end and growing fitness company with similarly devoted customers.
Under their agreement, Peloton would purchase products wholesale from Lululemon and then take them to a printer to add its own logo to the clothing it bought and sold to its members. It generally took a year from the time Peloton saw Lululemon's designs to having products ready to sell.
In its lawsuit, Peloton called the process "burdensome and time-intensive" and said that it "was not workable at the high demand levels Peloton started to experience." The company decided to break off the partnership and launch its own apparel line, which it says it tested with its members and instructors.
And that's where the trouble between the two companies begins. On Nov. 11, Lululemon's outside counsel sent a cease-and-desist letter claiming that several Peloton products — multiple bra types, a legging product and style of luxury tights — infringed on Lululemon designs and threatened to file a suit.
In that letter, Lululemon's attorney described Peloton products as "copies" of its own and suggested that the allegedly infringing products "indicates that Peloton may have used lululemon's proprietary and trade secret information," such as design specifications that the fitness company could have had access to through their previous relationship.
Peloton pointed in its complaint to differences between its products and Lululemon's, and in some cases claimed that Lululemon's patents aren't valid. In the case of the tights, for example, Peloton said, "Almost every retailer in the active wear market offers a similar legging with a banded waist."
For Peloton, apparel is a way to expand its revenue and overall offer to customers, and draw on the loyalty of its members. "We believe that we are still in the first inning of connected fitness industry growth and we have the opportunity to extend our leadership as the pioneer of this category," CEO John Foley told analysts earlier this year before launching its line.
Lululemon is on an inverted path, as an apparel maker now venturing into technology. Last year, it acquired virtual fitness tech company Mirror. Lululemon has filed patents for new technology, including an exercise mat that has a three-dimensional surface texture.