Lululemon sues Peloton for selling ‘copy-cat products’

Lululemon Athletica's logo is seen on the outside of their new flagship store on Robson Street during it's grand opening in downtown Vancouver, B.C., on Thursday August 21, 2014. Lululemon Athletica Inc. says it has launched an investigation after learning about reports of worker abuse at a manufacturing facility in Bangladesh that supplies the athleisure retailer. THE CANADIAN PRESS/Darryl Dyck. THE CANADIAN PRESS/Darryl Dyck

Lululemon Athletica Canada Inc. has launched a lawsuit against exercise equipment company Peloton Interactive Inc., accusing the stationary bicycle and treadmill maker of patent infringement.

In documents filed in a U.S. court on Monday, the Vancouver-based athletic apparel retailer claims Peloton is infringing on multiple design patents and selling “knock-off” bras and pants.

The lawsuit comes after Peloton ended a co-branding agreement with Lululemon earlier this year and announced its own private label, Peloton Apparel, in September.

Lululemon alleges Peloton is selling “copy-cat products” that closely resemble several of the retailer’s best-selling designs, including a pair of workout pants and a popular strappy sports bra.

“Unlike innovators such as Lululemon, Peloton did not spend the time, effort and expense to create an original product line,” Lululemon alleged in court documents.

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“Instead, Peloton imitated several of Lululemon’s innovative designs and sold knock-offs of Lululemon’s products, claiming them as its own.”

The retailer said it initially sent Peloton a cease-and-desist letter, laying out its concerns with the exercise equipment maker’s “blatant misappropriation” of Lululemon’s product designs, according to court documents.

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Lululemon said Peloton requested an extension to respond to those allegations, but then used the delay to “secretly prepare its own complaint and pre-empt the lawsuit that Lululemon had so clearly threatened.”

Last week, Peloton sued Lululemon, asking a U.S. court to declare that it has not infringed on Lululemon patents.

“Lululemon’s allegations lack any merit,” Peloton claimed in documents filed in a New York court.

“Even a quick comparison of the Lululemon patented designs with the allegedly infringing Peloton products reveals numerous clear and obvious differences that allow the products to be easily distinguished.”

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Peloton also claims that the brands of both companies are distinctive and well-recognized “making confusion between products a virtual impossibility.”

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But in a series of exhibits filed with a California court, Lululemon alleges several Peloton styles are nearly identical to Lululemon products.

One design the retailer highlighted is its Align pants, a pair of leggings Lululemon called one of its “all-time best-selling products.”

Lululemon alleges a Peloton style is an imitation of the Align pant, with a similar waistband and stitching.

The Canadian retailer said the similarity between Peloton products and Lululemon’s “iconic designs” is “likely to cause confusion, cause mistake, and to deceive” customers into thinking the Peloton apparel is made in affiliation with Lululemon.

The company alleges Peloton’s intention is to “blatantly 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 in the marketplace.”

In an emailed statement, Shannon Higginson, Lululemon general counsel and senior vice-president, said: “We are confident in our position and look forward to properly resolving this case through the courts.”

Peloton said it would not comment on active litigation.

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