Patent Pedaling With Peloton (Part II): Uphill

In final week’s column, I took a take a look at Peloton’s successes and struggles to this point when it comes to implementing its own patents. But that in fact is just half the image when speaking about an organization’s IP experience. An evaluation of how the corporate has dealt with IP disputes from the protection aspect can also be necessary — particularly for a unicorn like Peloton, what place an organization’s meteoric monetary success additionally serves to make the corporate a compelling goal for royalty-seeking patent holders. Add in the truth that Peloton is a comparatively new entrant into the mature business of stationary bikes — albeit one with a premium product, picture, and cultish following — and the truth that Peloton has already discovered itself the goal of a bunch of patent infringement suits ought to come as no shock.

In truth, it didn’t take lengthy for Peloton to get sued by a competitor. After no less than one failed try in 2014 by Peloton to license the patent portfolio of its competitor Icon (maker of the NordicTrack and different branded house health gear), Icon determined to sue Peloton on a few of its patents in 2016. In response, Peloton moved to switch the case to its house discussion board of the Southern District of New York — in case we wanted one other reminder of the significance of venue in patent instances — earlier than finally settling post-mediation in early 2018. Not a nasty end result for the corporate’s first foray into patent protection.

But that first bout with Icon was only the start. Since then, Icon has sued Peloton for patent infringement at least 3 times. First, Icon counterclaimed for patent infringement in a 2020 Delaware motion concerning either side’s treadmill merchandise. Yes, Peloton initiated that lawsuit, nevertheless it in all probability additionally should have anticipated that Icon would reply in form — highlighting one of many challenges for an organization like Peloton seeking to set up the worth of its patent portfolio. Namely, that the targets can chew again. Later in 2020, Icon filed a patent infringement case concentrating on Peloton’s up to date stationary bike, the Bike+ — resulting in Peloton submitting an IPR in opposition to the asserted patent. And just some weeks in the past, Icon filed yet one more patent infringement case in opposition to Peloton, this time concerning the “Auto Follow” function, what place the teacher’s voice directions result in computerized adjustment of the bike’s resistance. (For some motive, I think about a dog-sled driver yelling out “mush” once I consider this technological wizardry.) In quick, Icon and Peloton are treating one another like a pair that agreed to separate up just a few years in the past, solely to get again collectively simply to allow them to maintain combating.

That mentioned, the continued hostilities between Icon and Peloton do illustrate the punch-counterpunch nature of IP disputes between dedicated rivals. It is clearly necessary to each firms that every respects the opposite’s patent portfolios, as they compete to develop revolutionary enhancements to family/health heart staples like stationary bikes and treadmills. Sure, they compete on worth, branding, and the like. But feelings are inclined to run scorching when a cool new function is rapidly integrated by a competitor into its own choices. For Peloton, the problem with Icon is to try to get to no less than a cross-license, or no less than to reprise no matter led to the primary settlement between the events. Fending off makes an attempt by Icon to get a preliminary injunction, which Peloton was in a position to do in one of many filed instances, can go a good distance towards attending to detente. But at the same time as chasing settlement typically makes strong enterprise sense, Peloton may even need to guarantee that it continues to ship a message that it’s not afraid of full-scale patent litigation.

Sending such a message is necessary as a result of Icon is just one instance of a patent holder selecting to sue Peloton up to now yr. While the principle menace to Peloton long-term could come from a dogged competitor like Icon, Peloton has additionally been set upon by teeth-baring patent asserters of various breeds. As one instance, Peloton was not too long ago sued for patent infringement by Madd Dogg Athletics, greatest often called the homeowners of the “Spinning” trademark within the train context. In response, Peloton has rapidly filed an Alice movement in opposition to the asserted Madd Dogg patent claims, whereas additionally difficult Madd Dogg’s trademark in a separate continuing. In quick, Peloton has no qualms about upping the stakes in opposition to even essentially the most rabid patent proprietor in search of a share of Peloton’s revenues.

But the menace to Peloton shouldn’t be restricted to firms within the train environment. The most up-to-date patent infringement case — filed just some weeks in the past — in opposition to the corporate was truly filed by Sling TV-maker Dish Technologies, proprietor of streaming media patents. Dish is asserting these patents in opposition to Peloton, arguing that the true worth driver of Peloton’s kind is the streaming video expertise integrated into the Peloton train gear, which permits for streaming of instructor-led lessons to Peloton purchasers. We will see if this transfer by Dish will encourage different patent holders with patents that may be learn on completely different facets of Peloton’s services to file go well with. But Dish’s submitting already proves that Peloton’s patent “exposure” shouldn’t be restricted to patents directed solely to train gear per se.

Ultimately, it’s honest to say that we’re nonetheless within the earliest chapters of Peloton’s patent protection story. At the identical time, we are able to already see that Peloton has adopted an “active defense” approach to coping with patent infringement assertions in opposition to it. Whether it’s a movement to switch, an IPR, an Alice movement, and even concentrating on IP owned by the plaintiff — Peloton will do every thing it will probably, as early within the course of as it will probably do it, to get itself on degree floor for the combat forward. Because Peloton understands that even the tallest peak will be conquered by a decided rider pedaling uphill one stroke at a time. And similar to assault mode works for scaling hills, it will probably additionally work for keeping off patent lawsuits.

Please be at liberty to ship feedback or inquiries to me at gkroub@kskiplaw.com or through Twitter: @gkroub. Any matter recommendations or ideas are most welcome.

Gaston Kroub lives in Brooklyn and is a founding associate of Kroub, Silbersher & Kolmykov PLLC, an mental property litigation boutique, and Markman Advisors LLC, a number one consultancy on patent points for the funding group. Gaston’s observe focuses on mental property litigation and related counseling, with a powerful concentrate on patent issues. You can reach him at gkroub@kskiplaw.com or comply with him on Twitter: @gkroub.