Lululemon Athletica Inc. sued Peloton Interactive Inc. for patent infringement five days after the fitness bike company filed a preemptive suit against the clothing maker, as a dispute over a busted co-branding deal heats up in the booming home fitness space.

Peloton “imitated several of Lululemon’s innovative designs and sold knockoffs of Lululemon’s products, claiming them as its own,” the Vancouver, British Columbia, athleticwear company said in the lawsuit, filed Monday in federal court in California. 

Peloton pursued the deal with Lululemon in 2016 to benefit from the cachet of its products and designs, the Canadian company said in the suit. The clothing maker “supplied Peloton with some of Lululemon’s most innovative and popular athletic apparel” and let the New York firm add its own trademarks and resell the co-branded apparel through its retail outlets, according to the complaint.

Then, earlier this year, Peloton asked to end the co-branding pact, and Lululemon stopped supplying it with merchandise, it said in the suit. Peloton soon announced it was starting its own line of apparel but “did not spend the time, effort, and expense to create an original product line,” Lululemon claims.

HOME FITNESS BOOM

Instead, the exercise bike maker turned out the knockoffs, including its Strappy Bra, Cadent Laser Dot Legging, Cadent Laser Dot Bra, High Neck Bra, and Cadent Peak Bra, which together infringe six Lululemon patents, according to the complaint.

Peloton said in an email that it doesn’t comment on active litigation. 

The legal crossfire comes as the home fitness industry is thriving. Lululemon, once solely a yogawear company, has branched out into other business lines, including at-home fitness when it acquired startup Mirror for US$500 million last year. Peloton entered apparel in September with its own line of private label clothes. 

Peloton has been active in the courts as part of an effort to maintain dominance in a widening set of increasingly competitive fields. It filed patent lawsuits this month against two rivals, NordicTrack maker iFit and Echelon. Its lawsuit against Lululemon -- filed in federal court in Manhattan on Wednesday, two days before Black Friday’s start of the holiday shopping season -- was an effort to protect its new athleticwear line from a suit by the clothing maker, which had fired off a cease-and-desist letter to Peloton on Nov. 11.

‘GOOD CORPORATE CITIZEN’

Lululemon claims Peloton “immediately wrote back” to ask for more time -- until last Wednesday, Nov. 24 -- “to substantively respond” to the demands. The Canadian company says that as “a good corporate citizen” it granted the extension, only to find itself facing Peloton’s pre-emptive suit that very day. It is asking the California court to order Peloton to pay it for lost profits or at least a reasonable royalty for the alleged patent infringement.

“We are confident in our position and look forward to properly resolving this case through the courts,” Lululemon General Counsel and Chief Compliance Officer Shannon Higginson said in a statement.

Peloton said in its suit last week that it had been selling apparel since 2014 and began its own clothing line in September after an “amicable” termination of its co-branding relationship with Lululemon. 

“Lululemon’s allegations lack any merit,” it said in the Nov. 24 complaint. “Even a quick comparison of the Lululemon patented designs with the allegedly infringing Peloton products reveals numerous clear and obvious differences that allow the products to be easily distinguished.”

Peloton’s lawsuit is Peloton Interactive Inc. v. Lululemon Athletica Canada Inc., 21-cv-10071, U.S. District Court, Southern District of New York (Manhattan). Lululemon’s suit is Lululemon Athletica Canada Inc. v. Peloton Interactive Inc., 21-cv-9252, U.S. District Court, Central District of California.