Peloton Interactive (Peloton) has filed suit against ICON Health & Fitness Inc. (ICON) in the United States District Court for the District of Delaware. Peloton, a maker of fitness equipment, alleges that ICON has infringed upon its patents by stealing and integrating Peloton’s technology into its NordicTrack fitness products and, in addition, has engaged in false advertising and unfair business practices.
In its compliant, Peloton states that since 2012, it has introduced a number of innovations into the fitness industry that has greatly improved the at-home workout experience. Specifically, it states:
“Before Peloton invented and released the Peloton Bike, the fitness industry had struggled with an intractable divide: consumers could either (1) go to in-studio fitness classes to obtain the competitive thrill and engagement of working out with others, or (2) choose to use at home exercise equipment—which had seen virtually zero innovation in over a decade—to gain flexibility and time. They could never do both. Peloton solved that problem, and others, with its revolutionary new product and patented technology.”
More specifically, Peloton’s U.S. Patent No. 10,486,026 (“the ’026 Patent”) and U.S. Patent No. 10,639,521 (“the ’521 Patent”) uses sensors in its fitness products to gauge and track a user’s performance (e.g., how fast a user has run or biked) that it then compares to other users using its fitness equipment to designate a rank on a leader-board. This ranking system allows users of Peloton’s equipment to compete with one another, as they would do in a fitness class, but from their homes via live classes or pre-recorded classes.
In 2015, ICON’s NordicTrack began offering iFit, which allowed users to access pre-recorded fitness classes at home. As per Peloton’s complaint, iFit was not successful as ICON eventually winded up laying off 400 workers later that year. In late 2019, however, NordicTrack introduced "the iFit leaderboard." This leader board, as per Peloton’s complaint, infringes on its patents as it uses the same technology to allow NordicTrack users to compete with one another via rankings received while taking classes. Furthermore, Peloton alleges that NordicTrack has implemented "the iFit leaderboard" across multiple products, e.g., treadmills, bikes, ellipticals, rowers, etc, all of which, are also infringing upon its patents.
Additionally, Peloton has also alleged that ICON has been using deceptive trade practices and false advertising to mislead consumers to conclude that ICON’s products are cheaper and superior to Peloton’s. For instance, “to unfairly increase its market share, ICON employs a practice known as false reference pricing. Pursuant to this practice, ICON represents to consumers a false, inflated ‘original’ price of a product, and then informs consumers that the product is currently on sale for a significantly lower, discount price.” This practice allegedly misleads the consumer into believing they are receiving a more expensive product, and therefore a much higher quality product, when compared to Peloton. This ultimately hurts Peloton’s own sales and business.
Unsurprisingly, this is not the first time Peloton has gone after a competitor in the market for infringing on its patents. In 2018 and 2019, Peloton similarly went after Flywheel, claiming their Fly Anywhere bike used parts of their technology that tracks and compares rider performance.
Flywheel initially denied the allegations, but eventually settled out of court in February 2020. According to Business Insider, Flywheel informed its customers that it will no longer be offering in-home classes and customers would be eligible to trade in their Flywheel bike for a refurbished Peloton bike.
Peloton is seeking injunctive relief, damages, and lost profits from ICON.
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