Peloton, Lululemon and Nike Patent Infringement Lawsuits: Practical Intellectual Property Considerations

Peloton, Lululemon and Nike Patent Infringement Lawsuits: Practical Intellectual Property Considerations

Claire La MantiaClaire La Mantia is an IP Innovation Clinic Fellow and a 3L JD Candidate at Osgoode Hall Law School. This article was written as a requirement for Prof. Pina D’Agostino’s Directed Reading: IP Innovation Program course.

In late November 2021, Lululemon launched a lawsuit for design patent infringement against Peloton in relation to perceived similarities in the design elements of various pieces of activewear, including sports bras and leggings. This lawsuit was made in response to Peloton’s claim that Lululemon’s design patents for these activewear pieces were invalid. Only months later, in January 2022, Nike brought an action against Lululemon for utility patent infringement. Nike’s allegations stem from Lululemon’s recent acquisition of Mirror, a wall-mounted, at-home fitness device that tracks a user’s workouts, fitness progress, and offers a range of exercise classes and training sessions. Nike claims that Mirror infringes its patents covering technology that enables users to target specific levels of exertion, compete with other users, and record their own performance, while Lululemon has indicated that it will challenge the validity of Nike’s patents for this technology. These cases demonstrate interesting practical considerations that are important for those seeking intellectual property protections to reflect on.

Firstly, they illustrate the potential to use intellectual property for both offensive and defensive purposes. On one hand, a party may seek intellectual property rights in order to protect themselves from competitors attempting to use their product. For example, holding a patent allows the owner to exclude others from making, using, or selling the patented invention or design and claim compensation where a party does so without the patent holder’s permission, as Lululemon and Nike are attempting to do. On the other hand, a party may utilize intellectual property as part of an offensive business strategy. A party may obtain a patent so that they can establish their own freedom to operate and make, use, or sell the patented invention or design. Likewise, intellectual property can be a source of revenue where the party grants licenses to selectively allow others to make, use, or sell the invention or design.

Secondly, the cases indicate potential strategies a party can use to defend against claims of infringement. A common defence is to claim that the patent a party is being accused of infringing is invalid and should not have been granted in the first place. The allegation of invalidity could be based on a claim that the patent fails to fulfill one or multiple of the criteria required for patentability. In the case of a utility patent, this could include that the invention is not new, does not demonstrate an aspect of ingenuity, is incapable of use, or is related to subject matter that has been excluded from patentability. For a design patent, a claim of invalidity could include that the design is not new or that the feature pertains primarily to function rather than ornamental design. Both Peloton and Lululemon challenge the validity of the patents they are alleged to have infringed, with Peloton arguing that Lululemon’s design patents are anticipated and/or obvious and Lululemon claiming that Nike’s utility patents are overly broad. Another potential strategy is denying that infringement occurred by differentiating the alleged infringing act from the patent in question. Peloton is attempting to use this strategy against Lululemon by claiming that both companies have distinctive and recognizable brands and the designs of Peloton’s athletic wear would not be confused with Lululemon’s, and thus would not constitute infringement.

Lastly, these cases demonstrate the potential for continuing costs associated with intellectual property protections. While intellectual property protections are important business investments and can serve as a means of enforcement and protection of rights, the intellectual property system is not fool-proof and parties may have to make ongoing investments to defend their own registered intellectual property as well as defend themselves against claims of infringement. Peloton, Lululemon and Nike have each made significant investments in intellectual property protections pertaining to activewear, accessories and exercise equipment, including utility patents, design patents, and trademarks. However, all have been involved in intellectual property disputes, both as the intellectual property rights holder and the alleged infringer.