The recently filed patent infringement lawsuit by Peloton against Icon has drawn its first blood. Peloton had moved to dismiss certain counterclaims brought by Icon in the lawsuit, including:
- Icon’s claim of patent infringement, because Peloton claimed a license to the subject patents; and
- Icon’s claim of false advertising because the Peloton advertising statements complained of were non-actionable puffery or otherwise not misleading.
In the decision by District Court Judge Richard Andrews in the District of Delaware, Icon’s claims of patent infringement survive for now, although Icon did lose a couple of claims for false advertising.
Back in 2017, Icon and Peloton entered into a license agreement relating to the two patents Icon asserts anew in the present Peloton/Icon battle. Those patents relate to Icon’s iFit technology. Key to this litigation is language from that license agreement that it covers “…the existing Peloton Bike and substantially similar products/technologies.”
At issue in the present lawsuit is Peloton’s treadmill, which was not in production at the time of the license agreement. The legal issue for the Court, therefore, was whether the Peloton Tread product is “substantially similar” to the Peloton Bike. If it is, then the 2017 license will cover the Peloton Tread, removing any potential liability for Peloton relative to the subject iFit patents.
At this preliminary stage of the proceeding, the Court found that it must resolve any ambiguities in Icon’s favor (against the movant in this motion to dismiss, Peloton). And, in general, the Court did find it ambiguous as to whether the Peloton treadmill was a substantially similar product or technology, as compared to the Peloton bike. Thus, Icon’s patent infringement claims survive … for now.
The second major assertion in Peloton’s motion to dismiss was that Icon’s claims of false advertising should be dismissed. Those allegations fell within three broad categories:
- innovation-type statements;
- competitor-type statements; and
- advertisements offering music functionality.
The Court split the baby, offering partial victories/defeats to both parties.
The “innovation” statements complained of by Icon included statements by Peloton that it was an “innovator” and “a hardcore technology company” that had developed a product that was “the first of its kind.” Relative to the first two statements, the court found that they were non-actionable puffery given that they were not subject to objective measurement. Relative to the last statement, the Court analogized this statement to the statements such as a product that is “new and improved” – a puffery statement that has long been held to be non-actionable. As such, Icon’s claim that the “innovation-type” statements by Peloton were false advertising was dismissed without prejudice.
Similarly, Icon’s claims against the “competitor-type” statements were also dismissed. These statements comprised commentary from Peloton’s CEO that implied that Peloton had no competitors, such as that “nobody else provides [certain features], so we’re kind of a category of one.” In granting this portion of Peloton’s motion to dismiss, the Court held that broad, generalized claims of superiority are not statements of fact and are, therefore, not actionable.
Lastly, Icon did salvage its false advertising statement relative to certain Peloton Instagram ads relating to musical offerings. In those advertisements, Peloton directed customers to “our @spotify playlists…” But, per Icon’s complaint, those playlists contained songs that Peloton did not have the rights to, in view of a 2019 copyright lawsuit relating to Peloton’s music streaming. The Court found that, in view of the chance that these advertisements might mislead or confuse customers, Peloton’s motion to dismiss these claims is denied, at this time.
Litigation is no stranger to either Icon or Peloton, so it is no surprise that the battle has been engaged in earnest. We will keep you apprised of further developments.