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Lululemon vs. Peloton: The fine line between inspiration and imitation in fashion

The dispute comes at a time when athleisure is booming
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People line up outside a Lululemon Athletica store in Ottawa, as non-essential retail stores re-open with limited in-store capacity, on the first day of OntarioBԪַs first phase of re-opening amidst the third wave of the COVID-19 pandemic, on June 11, 2021. THE CANADIAN PRESS/Justin Tang

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 scuffle 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 retailerBԪַs claims as baseless.

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

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

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

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

BԪַItBԪַs sort of a BԪַmore money, more problemsBԪַ issue. A style that is valuable is more likely to get ripped off.BԪַ

In an emailed statement, Shannon Higginson, Lululemon general counsel and senior vice-president, said: BԪַWe are confident in our position and look forward to properly resolving this case through the courts.BԪַ

Peloton said it would not comment on active litigation.

The dispute comes at a time when athleisure is booming.

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.

ItBԪַs not the first time Lululemon BԪַ often credited as the creator of lifestyle athleisure wear BԪַ 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 KleinBԪַs athletic leggings, including its BԪַperformance compression overlapping waistband pants,BԪַ were similar to LululemonBԪַs 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.

BԪַThereBԪַs no intellectual property watchdog,BԪַ Froese said. BԪַItBԪַs up to companies to enforce their rights with design patents.BԪַ

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

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 LululemonBԪַs logo.

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

Lululemon alleges Peloton began selling BԪַcopycat productsBԪַ that closely resemble several of the retailerBԪַs best-selling styles.

BԪַPeloton imitated several of LululemonBԪַs innovative designs and sold knockoffs of LululemonBԪַs products, claiming them as its own,BԪַ the company alleges in court documents filed on Nov. 29.

BԪַThese knockoffs include PelotonBԪַs Strappy Bra, Cadent Laser Dot Legging, Cadent Laser Dot Bra, High Neck Bra, and Cadent Peak Bra, which collectively infringe six different lululemon patents.BԪַ

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

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

Peloton noted that its bra BԪַis cut straight across and includes a mesh layerBԪַ while LululemonBԪַs patents BԪַhave a scooped back and do not include a mesh layer.BԪַ

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

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

Yet he said LululemonBԪַs allegation of unfair competition could be successful.

BԪַIf you look at all the facts together, itBԪַs kind of obvious,BԪַ Enica said. BԪַPeloton cancelled their agreement with Lululemon and then turned around and put very similar garments on the same rack BԪַ it would be hard for some consumers to tell them apart.BԪַ

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

BԪַPeloton ended the co-branding agreement and then very quickly came to market with their own line,BԪַ she said. BԪַThis all happened in 2021. Did they just reverse engineer the product and then say, BԪַOK, weBԪַre gonna freeze you out Lululemon?BԪַBԪַ

Meanwhile, legal experts say the case also stands out for its apparent use of BԪַforum shoppingBԪַ BԪַ 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.

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

BԪַPart of the inefficiency of patent litigation stems from the differences in how sympathetic different districts are to plaintiff lawsuits.BԪַ

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

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

Brett Bundale, The Canadian Press

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