Lululemon fires back at Peloton

Lululemon Athletica Inc. sued Peloton Interactive Inc. for patent infringement five days after the fitness bike company filed a pre-emptive suit against the clothing maker, as a dispute over a busted co-branding deal heats up.

Peloton pursued the deal with Lululemon in 2016 “to benefit from the popularity of Lululemon’s products and designs,” the Vancouver-based athleticwear company said in its lawsuit Monday, filed in federal court in California.

It claimed it “supplied Peloton with some of Lululemon’s most innovative and popular athletic apparel” and let the New York firm add its own trademarks and resell the co-branded apparel through its retail outlets.

Then, earlier this year, Peloton asked to end the co-branding pact, and Lululemon stopped supplying it with merchandise, according to the lawsuit. Peloton soon announced it was starting its own line of apparel but “did not spend the time, effort, and expense to create an original product line,” Lululemon claims.

“Instead, Peloton imitated several of Lululemon’s innovative designs and sold knockoffs of Lululemon’s products, claiming them as its own,” the Canadian company says in the suit. “These knockoffs include Peloton’s Strappy Bra, Cadent Laser Dot Legging, Cadent Laser Dot Bra, High Neck Bra, and Cadent Peak Bra, which collectively infringe six different Lululemon patents.”

Peloton’s suit — filed in federal court in Manhattan on Wednesday, two days before Black Friday’s start of the holiday shopping season — was a pre-emptive move to protect the workout bike company’s new athletic-wear line from the complaint Lululemon had threatened to bring. The clothing maker had fired off a cease-and-desist letter to Peloton on Nov. 11. Peloton and its lawyer did not immediately respond to requests for comment.

Peloton “intended to closely copy Lululemon’s proprietary designs and pass off its goods as Lululemon’s high quality products to misappropriate the immense goodwill that Lululemon has spent enormous time, effort, and expense to cultivate,” Lululemon said in its complaint.

The company had in a Nov. 11 letter to Peloton threatened to sue unless sales of the alleged knockoffs were halted.

Peloton’s lawsuit is Peloton Interactive Inc. v. Lululemon Athletica Canada Inc., 21-cv-10071, U.S. District Court, Southern District of New York (Manhattan). Lululemon’s suit is Lululemon Athletica Canada Inc. v. Peloton Interactive Inc., 21cv-9252, U.S. District Court, Central District of California.

Lululemon shares closed Monday at US$463.26, up 1.5 per cent in New York trading. Peloton shares fell 4.4 per cent to US$44.39.