The patent infringement lawsuit recently filed by Peloton against Icon has tasted its first blood. Peloton had requested that certain counterclaims made by Icon in the lawsuit be dismissed, including:
- Icon’s patent infringement lawsuit because Peloton claims a license to the patents in question; and
- Icon’s allegation of false advertising because Peloton’s alleged advertising was not punishable or otherwise misleading.
In the Delaware District Judge Richard Andrews’ decision, Icon’s patent infringement claims remain in place for the time being, although Icon has lost some false advertising claims.
Icon and Peloton signed a license agreement for the two patents back in 2017, which Icon is claiming again in the current battle between Peloton and Icon. These patents relate to Icon’s iFit technology. The key to this litigation is the wording in this license agreement that it covers “… the existing Peloton Bike and substantially similar products / technologies”.
The present lawsuit concerns the Peloton treadmill, which was not in production at the time of the license agreement. The legal question for the court was therefore whether the Peloton Tread product is “essentially similar” to the Peloton Bike. If so, the 2017 license will cover the Peloton Tread, eliminating any potential liability for Peloton with respect to the relevant iFit patents.
In this preliminary phase of the proceedings, the court determined that it had to clear up all ambiguities in favor of Icon (against Peloton’s request for dismissal). And in general, the court found it inconclusive as to whether the Peloton treadmill was an essentially similar product or technology to the Peloton bicycle. Thus Icon … ‘s patent infringement claims remain in place for the time being.
The second major allegation in Peloton’s dismissal motion was that Icon’s allegations should be dismissed for false advertising. These allegations fell into three broad categories:
- Statements of the type innovation;
- Statements from the competitor type; and
- Advertising with music functionality.
The court split up the baby and offered partial wins / losses to both parties.
The “innovation” claims Icon complained about included statements from Peloton that it was an “innovator” and “a hardcore technology company” that had developed a product that was “the first of its kind”. Regarding the first two statements, the court found that they were unenforceable puffery as they were not subject to any objective measurement. Regarding the last statement, the court analogized this statement with statements such as a product that is “new and improved” – a buffering statement that has long been regarded as incontestable. As a result, Icon’s claim that Peloton’s “innovative” statements were false advertising was rejected without prejudice.
In a similar way, Icon’s claims against statements by “competitors” were also rejected. These statements included comments from Peloton’s CEO implying that Peloton had no competitors such as [certain features]So we’re sort of a Category of One. ”In approving this portion of Peloton’s dismissal motion, the court found that broad, generalized superiority claims are not assertions of fact and are therefore not contestable.
Finally, Icon saved its false advertising claim regarding certain Peloton Instagram ads related to music offerings. In these advertisements, Peloton directed customers to “our @spotify playlists …”. However, according to Icons’ complaint, those playlists contained songs that Peloton did not have rights to in the face of a 2019 copyright lawsuit related to Peloton’s music streaming. The court found that Peloton’s motion to dismiss these claims is currently denied because the advertisement could mislead or confuse customers.
Litigation is no stranger to Icon or Peloton, so it’s no surprise that the fight is serious. We will keep you up to date on further developments.
