Lululemon vs. Peloton: The subtle boundary between fashion inspiration and imitation-Pique Newsmagazine

2021-12-06 19:06:58 By : Ms. Aileen AI

For the untrained person, the US design patent number D709,668 is just a sports bra. 

But in a high-profile legal dispute between sportswear retailer Lululemon Athletica Canada Inc. and sports equipment company Peloton Interactive Inc., lace-up underwear is one of six different design patents.

Former fitness apparel partners are fighting head-to-head in a US court. Lululemon accused Peloton of patent infringement on its new series of bras and leggings, while Peloton believes that the retailer’s claim is unfounded.

This is a case that focuses on the cruel areas of fashion and the nuances between inspiration and imitation. 

It also highlights the challenge of proving design patent infringement in court—especially fashion and ubiquitous style—and the use of so-called forum shopping in legal battles. 

Many lawyers stated that although winning a patent infringement case is usually an uphill battle, Lululemon's unfair competition allegations have strong reasons. 

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

"It's a'more money, more problems' problem. Valuable style is more likely to be ripped off."

Shannon Higginson, Lululemon's general counsel and senior vice president, said in an email statement: "We are confident in our position and look forward to a proper resolution of this case through the court."

Peloton said it would not comment on the ongoing litigation.

The controversy occurred at a time when sports and leisure were booming. 

According to data from the US-based market research company NPD Group, strong demand for sportswear continues during the pandemic and has led clothing sales so far in 2021.

Lululemon-generally regarded as the creator of lifestyle sportswear-is not the first time that Lululemon has turned to the court to enforce its design patents. 

In 2012, the Vancouver-based retailer accused the fashion company Calvin Klein Inc. of infringing its patent on the design of yoga pants in court documents.  

It claims that some of Calvin Klein's sports leggings, including its "performance compression overlap waistband pants," are similar to the patented cross fabric design used by Lululemon in its Astro Pant. 

The case has been settled out of court. 

In 2017, Lululemon withdrew a similar lawsuit against Under Armour Inc., accusing the sportswear manufacturer of plagiarizing the design of its sports bra.

"There is no intellectual property regulatory agency," Froese said. "It is up to the company to exercise the right to design patents." 

Part of the reason why the Lululemon-Peloton case is so compelling is the history of once close companies.  

They established a co-branding relationship in 2016. Lululemon provides clothing for the stationary bicycle and treadmill manufacturer, and Peloton sells products with the Lululemon logo and its own trademark. 

Earlier this year, Peloton ended the relationship and soon announced its own brand Peloton Apparel.

Lululemon claims that Peloton has begun selling "counterfeit products" that are very similar to several of the retailer's best-selling styles.

The company stated in court documents filed on November 29 that "Peloton imitated several innovative designs of Lululemon and sold imitations of Lululemon products, claiming that they were their own." 

"These imitations include Peloton's Strappy Bra, Cadent Laser Dot Legging, Cadent Laser Dot Bra, High Neck Bra and Cadent Peak Bra, which together infringe six different Lululemon patents."

However, legal experts said that design patents are issued for extremely specific patterns and styles, so patent infringement cases are difficult to prove. 

For example, in the priority claim filed by Peloton on November 24, the company highlighted the difference between the Peloton Branded Strappy Bra and Lululemon patents. 

Peloton pointed out that its bra "is cut directly and includes the mesh layer", while Lululemon's patent "has a scoop back and does not include the mesh layer."

Fashion lawyer Bogdan Enica said these changes are subtle but enough to allow the court to dismiss Lululemon's complaint.

Enica, a partner of Practus LLP in Miami, said: "This type of patent is only for a very narrow scope."

But he said that Lululemon's allegations of unfair competition may be successful.

"If you put all the facts together, it's obvious," Enika said. "Peloton canceled the agreement with Lululemon, then turned around and put very similar clothing on the same shelf... Some consumers have difficulty distinguishing them."

In fact, Froese said, the timetable is likely to be a factor in the case. 

"Peloton terminated the co-branding agreement and soon brought its product line to the market," she said. "This all happened in 2021. Did they just reverse engineer the product and say,'Well, we are going to freeze you out of Lululemon?'" 

At the same time, legal experts said that the case was also notable for its obvious use of "forum shopping"-a term that describes the litigants' efforts to try their cases in jurisdictions deemed friendly to their business. 

For example, Peloton filed a lawsuit in New York, while Lululemon filed a lawsuit in California.

Peloton’s decision on where to file “probably aims to allow the case to be heard in an area that is more sympathetic to infringement claims than other areas on average,” said Stevie Ens, an expert on business strategy and intellectual property protection. Suntech School of Business, University of British Columbia.

"Part of the reason for the inefficiency of patent litigation is that different regions have different levels of sympathy for the plaintiff's litigation."

He said that these cases are also decided by juries, and the jury members "usually know little about the technical and legal aspects of the case." 

Minns added: "This seems to be a clear patent infringement case; however, nothing in the patent litigation is clear."

The Canadian Press report was first published on December 6, 2021.

Brett Bundale, Canadian media