Lululemon Wants “Improper Anticipatory” Peloton Lawsuit Tossed Out

Lululemon and Peloton are squabbling over more than sports bras and yoga pants alike in their just-started legal battle. Peloton clothing, which allegedly infringes Lululemon design patents and the trade dress, is at the center of the declarative (“DJ”) lawsuit the exercise bike manufacturer filed in a New York federal court and the complaint of violation that Lululemon filed in a California federal court shortly thereafter. However, as Lululemon’s motion dismissal filed on Friday indicates, the parties are currently at odds over a more fundamental issue: where their case should take place.

According to the motion of denial filed with the United States District Court for the Southern District of New York on January 7 in response to Peloton’s complaint, Lululemon claims that his former partner used the “professional courtesy” that Lululemon granted him to “play” the venue in the case of design patent infringement and commercial dress. Specifically, Lululemon claims he was “misled” by Peloton’s legal counsel, who took additional time to provide a substantive response to the termination and desist letter he received from Lululemon, and therefore used that time to “prepare a [DJ] report and then run to this court, his home court, to prevent Lululemon from filing a complaint in his choice of court.

While venue conflicts are generally governed by the first-to-file rule, which dictates that when there are two competing lawsuits, the first lawsuit should take priority, Lululemon argues that there is a “critical exception” when the first cause is “a Improper anticipatory declarative judgment action.This is exactly what is happening here, according to Lululemon, as the action from New York-based Peloton’s DJ was brought in response to a direct and actual threat of litigation.

Turning his attention to a number of arguments Peloton made to refute his DJ’s characterization as a forerunner, including the fact that he brought the action because he “couldn’t afford the damage to his reputation for leaving Lululemon’s claims without. answer “, Lululemon states that such arguments are” baseless “. Among other things, Lululemon argues that there was no risk of reputational damage for Peloton due to the claims he made in his ceasing and desisting, as such claims were not public at the time and, therefore, “did no harm” In fact, Lululemon claims that it was Peloton who “publicly conveyed the parties’ controversy.”

Lululemon Peloton
One of Peloton’s bras (left) and a patent drawing of Lululemon (right)

Even weigh in favor of dismissal? The issue of convenience, which is typically a venue-related consideration, but according to Lululemon, isn’t as relevant here as it might be in other cases, as both sides are “huge publicly traded companies, each with annual revenues in excess of $ 4. billions “and a” nationwide presence “. This means that “litigation in any specific venue in the United States is not particularly convenient or inconvenient.”

Beyond that, Lululemon claims that California, not New York, is the “center of Peloton’s illicit activities.” Peloton maintains “13 showrooms in California, the highest number in any state” versus 6 in New York. As for its operations, Lululemon says a small (but seemingly substantial) percentage of its annual sales come from California, which is home to what is “effectively its US headquarters for the product and brand, where [it] makes most of its major project development and branding decisions ”. Meanwhile, 17% of Lululemon’s retail stores are located in California, compared with 6% in New York.

Taken in conjunction with the policy at stake (namely that “federal courts, including both the Second Circuit and the Federal Circuit, uniformly condemn this type of conduct”, as it serves “to discourage potential plaintiffs from communicating with potential defendants in an attempt to reach – judicial resolution of their disputes “), Lululemon argues that” the clearly anticipatory nature of Peloton’s decision [DJ] the action weighs heavily in favor if this action is rejected.

If the court decided to fire Peloton’s DJ, the case as a whole would still be far from over, as such a decision would have no impact on the lawsuit that Lululemon filed in California in the wake of Peloton’s filing and Peloton would inevitably filed their claims in connection with that lawsuit.

The rival cases began in late November when Peloton, fresh from a 5-year clothing contract with Lululemon, filed a DJ action in the New York federal court, seeking an injunction not to violate a series of Lululemon’s design patents and trades clothes through its new clothing offerings. Lululemon responded with a counterclaim, arguing that Peloton is involved in patent infringement of design and commercial apparel in connection with the sale of “copy” sportswear in the wake of having pulled the plug from the parties’ 5-year partnership. brand partnerships.

According to his complaint, Lululemon claims that “unlike innovators like [itself]”when Peloton decided to launch her own clothing collection,” she didn’t spend the time, effort and expense to create an original product line, [and] instead, Peloton imitated many of lululemon’s innovative designs and sold imitations of lululemon’s products, claiming them as his own.

The case is Peloton Interactive, Inc. v. Lululemon Athletica Canada Inc., 1: 21-cv-10071 (SDNY).

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