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Lululemon-Peloton lawsuit shines light on challenges of proving design infringement

Women's shorts are displayed on mannequins as a woman shops at Lululemon Athletica's new flagship store on Robson Street in Vancouver. THE CANADIAN PRESS/Darryl Dyck

To the untrained eye, U.S. Design Patent No. D709,668 is just a sports bra.

But the strappy undergarment is among six different design patents at the centre of a high-profile legal lawsuit between athletic apparel retailer Lululemon Athletica Canada Inc. and exercise equipment company Peloton Interactive Inc.

The former fitness clothing partners are going head-to-head in U.S. courts, with Lululemon accusing Peloton of patent infringement over its new line of bras and leggings and Peloton brushing off the retailer’s claims as baseless.

It’s a case that shines a spotlight on the cutthroat realm of fashion and the fine line between inspiration and imitation.

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It also highlights the challenges of proving design patent infringement in court – especially with trendy and ubiquitous styles – and the use of so-called forum shopping in legal fights.

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Multiple lawyers suggested that while winning a patent infringement case is typically an uphill battle, Lululemon has a strong case with its allegation of unfair competition.

“One of the problems is that when designs become popular in the marketplace, they tend to get copied,” said Ashlee Froese, a fashion and branding lawyer and founder of Froese Law in Toronto.

“It’s sort of a ‘more money, more problems’ issue. A style that is valuable is more likely to get ripped off.”

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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The dispute comes at a time when athleisure is booming.

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Strong demand for athletic clothing continued during the pandemic and is leading apparel sales so far in 2021, according to the NPD Group, a U.S.-based market research company.

It’s not the first time Lululemon – often credited as the creator of lifestyle athleisure wear – has turned to the courts to enforce its design patents.

In 2012, the Vancouver-based retailer accused fashion house Calvin Klein Inc. of patent infringement over a yoga pant design in court filings.

It claimed some of Calvin Klein’s athletic leggings, including its “performance compression overlapping waistband pants,” were similar to Lululemon’s patented crossover fabric design used in its Astro Pant.

The case was settled out of court.

In 2017, Lululemon dropped a similar case against Under Armour Inc. that accused the athletic apparel maker of copying the design of its sports bras.

“There’s no intellectual property watchdog,” Froese said. “It’s up to companies to enforce their rights with design patents.”

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The Lululemon-Peloton case stands out in part because of the history between the once-chummy companies.

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They launched a co-branding relationship in 2016, with Lululemon providing the stationary bicycle and treadmill maker with apparel, and Peloton selling the merchandise with its own trademark alongside Lululemon’s logo.

Then earlier this year, Peloton ended the relationship and shortly after announced its own private label, Peloton Apparel.

Lululemon alleges Peloton began selling “copycat products” that closely resemble several of the retailer’s best-selling styles.

“Peloton imitated several of Lululemon’s innovative designs and sold knockoffs of Lululemon’s products, claiming them as its own,” the company alleges in court documents filed on Nov. 29.

“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.”

However, legal experts say design patents are issued for extremely specific patterns and styles, making a patent infringement case difficult to prove.

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In a pre-emptive claim Peloton filed on Nov. 24, for example, the company highlighted the differences between the Peloton Branded Strappy Bra and Lululemon’s patents.

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Peloton noted that its bra “is cut straight across and includes a mesh layer” while Lululemon’s patents “have a scooped back and do not include a mesh layer.”

The variations are subtle but could be enough for a court to dismiss Lululemon’s complaint, according to fashion lawyer Bogdan Enica.

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“This type of patent is issued for something quite narrow,” said Enica, a Miami-based partner at Practus LLP.

Yet he said Lululemon’s allegation of unfair competition could be successful.

“If you look at all the facts together, it’s kind of obvious,” Enica said. “Peloton cancelled their agreement with Lululemon and then turned around and put very similar garments on the same rack … it would be hard for some consumers to tell them apart.”

Indeed, the timeline is likely to be a factor in the case, Froese said.

“Peloton ended the co-branding agreement and then very quickly came to market with their own line,” she said. “This all happened in 2021. Did they just reverse engineer the product and then say, ‘OK, we’re gonna freeze you out Lululemon?'”

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Meanwhile, legal experts say the case also stands out for its apparent use of “forum shopping” – a term that describes efforts by litigants to have their case heard in a jurisdiction perceived to be friendly to their cause.

For example, Peloton filed its lawsuit in New York while Lululemon fired back with a claim in California.

Peloton’s decision about where to file “is presumably an attempt to get the case heard in a district that is, on average, less sympathetic to infringement claims than other districts,” said Steven Minns, an expert on business strategy and intellectual property protection with the University of British Columbia’s Sauder School of Business.

“Part of the inefficiency of patent litigation stems from the differences in how sympathetic different districts are to plaintiff lawsuits.”

These cases are also decided on by juries with people “who typically have little knowledge of the technical and legal aspects of a case,” he said.

Minns added: “It would seem to be a clearcut case of patent infringement; however, nothing in patent litigation is clear cut.”

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