What happens when companies move from being partners to becoming rivals? It's an important question at a time when brand collaborations are all the rage.
We're seeing this play out now with two of the hottest sports brands on the market: exercise equipment giant Peloton and activewear juggernaut Lululemon. For five years, these companies teamed up to create co-branded workout apparel. But now, they're engaged in a bitter legal battle, with Lululemon accusing Peloton of copying its designs, and Peloton fighting back, saying its designs are original.
There are plenty of subtle arguments in the lawsuits filed by both parties. But more broadly, it's about how Lululemon and Peloton have evolved into competitors as they each seek out new revenue streams. Peloton has started creating apparel and Lululemon has started selling exercise equipment through its acquisition of Mirror . These lawsuits appears to be the brands' attempt to define their turf and prevent the other from impinging on it.
"It seems like what Lululemon is really upset about is that they had a former partner who is now a competitor," says Sarah Burstein, a professor of law at the University of Oklahoma, who specializes in design patents. "That's what so many of these cases come down to: They don't want to compete."
The legal tussle
Peloton and Lululemon first began collaborating in 2016 on workout apparel that featured both brands' logos. The deal made sense. It allowed Peloton to sell high-quality clothing designed by an expert activewear maker. Meanwhile, it enabled Lululemon to tap into Peloton's devoted customer base.
Lululemon also alleged that Peloton infringes on its trade dress rights for it Align legging—a popular product that generates hundreds of millions of dollars for Lululemon in the U.S. alone. Lululemon said Peloton's pant is "confusingly similar" to the Align and is sold "to identical customers" through overlapping distribution and marketing channels. Lululemon said that if Peloton didn't stop selling these alleged copycat products, it would file a copyright infringement lawsuit.
Things have only escalated since then. Peloton didn't comply with Lululemon's demands; instead, it preemptively sued Lululemon in federal court on November 24, asking the court to settle the matter by declaring that Peloton hadn't infringed on Lululemon's patents or trade dress rights. In its filings, Peloton argues that design elements in its sports bras and leggings are common throughout the market. At one point, Peloton highlighted a bra that Lululemon patented in 2017, contrasting it with a Sweaty Beatty bra that came out in 2015 and had very similar design and functional elements. In other words, Peloton argues that Lululemon's patents aren't valid because they're not particularly unique, and therefore "cannot be infringed upon."
Burstein notes that legal battles aren't always just about legal rights. There's also brand image to consider. By going after each other in such a high-profile case, both parties have to think through how lawsuits like this may affect consumer perception of their brands. Burstein says it's important for the companies not to look like they're strong-arming the other. "There's law, and there is business and PR," she says. "Part of pursuing these lawsuits has to do with how you're perceived in the market. You never want to come off as bullying."
One famous example was when Apple sued Samsung for willfully infringing on Apple's design and utility patents related to the iPhone. In 2012, a jury awarded Apple $1.049 billion in damages and Samsung zero damages in its countersuit.
Still, most lawsuits settle out of court. But if the case does progress in the court system, there could be millions of dollars at stake. "Patent infringement is a very scary weapon to have in your litigation," says Burstein.
- The Lululemon Laser Focused Bra Lets You Give 100-Percent Effort
- The insurance battle for life-saving treatment
- Emiliano Sala search RESUMES after Lionel Messi and host of football stars help raise £270k for private rescue mission
- Legal Marijuana Is So Close You Can Smell It in New Jersey. But It Could Be Awhile.
- I:Team: Paralyzed Boxer Battles for Better Ringside Medicine
- GOP in the dark as Trump weighs emergency declaration
- Cold, Wild Ride: Racing Alaska's Iditasport 100K
- The Curse of the Bahia Emerald, a Giant Green Rock That Wreaks Havoc and Ruins Lives
- You know last year's top movies. Now let us make the case for our favorites
- Why Steam, GOG Dropped Sci-Fi Strategy Game ‘Star Control: Origins’
- Wireless earbuds will soon last for hours longer
- Opening credits roll for Facebook's colorful court hearing
- Fam Damily
- 30 innovations that improved the world in 2017
- When Bill Gates needed a wartime consiglieri
- Taliban territory: Life in Afghanistan under the militants
- This lawsuit could shut down neo-Nazi site The Daily Stormer
- French startups using ‘pitch’ accused of trademark violation by maker of nation’s most infamous dessert
- Man Down
- U.S. permanently bans BetOnSports
Inside Lululemon and Peloton’s messy legal battle over sports bras have 860 words, post on www.fastcompany.com at December 1, 2021. This is cached page on Business News. If you want remove this page, please contact us.