A federal jury in Delaware has found that Peloton infringed an NEC Corporation patent covering content-streaming technology, and awarded $20.5 million in damages.
The verdict was returned on Friday, July 31, 2026, in the U.S. District Court for the District of Delaware, in NEC Corp. v. Peloton Interactive, Inc., case number 1:22-cv-00987.
According to the jury verdict form, the jury found that Peloton directly infringed claims 1, 11, 22 and 26 of U.S. Patent No. 8,752,101 through two accused video players, Google ExoPlayer/Media3 and Apple AVPlayer. The rest of the form came back as follows:
- Induced infringement: No. NEC did not prove Peloton actively induced its customers to infringe.
- Contributory infringement: No, on every claim and both video players.
- Invalidity: No. Peloton did not prove the claims were invalid for lack of an adequate written description, the only invalidity theory on the form.
- Damages: $20.5 million.
- Form of the award: A running royalty through the date of trial, rather than a one-time lump sum.
- Willfulness: No. Peloton’s infringement was not willful.
The no-willfulness finding removes the basis NEC presented for enhanced damages, which the court can award at up to three times the underlying amount. Because the money was designated a running royalty through trial rather than a lump sum, it compensates NEC for infringement up to this point. The verdict form does not establish what, if anything, applies after the trial date.
The patent, titled “Distribution system,” was issued in 2014 and claims priority to a Japanese application filed November 5, 2009. It relates to adaptive bitrate streaming, and specifically selecting a code rate based on both the time remaining before a scheduled playback start and the amount of content the receiving device has already buffered. The accused players are third-party products supplied by Google and Apple, used in Peloton’s devices.
The jury was asked to calculate a reasonable royalty as of a hypothetical license negotiation in July 2016, and was told to base any award on the value attributable to the patented technology alone rather than the entire product.
NEC filed the case on July 28, 2022, asserting three patents, and two did not survive to trial. The Patent Trial and Appeal Board invalidated one at Peloton’s request. In a June 30 ruling made public in redacted form on July 21, Judge Christopher J. Burke granted Peloton summary judgment on U.S. Patent No. 8,909,809, finding that NEC had not shown the accused services calculated and then used the specific “correction amount” the patent requires, either literally or under the doctrine of equivalents. An earlier ruling also dismissed NEC’s pre-suit indirect- and willful-infringement claims, because Peloton received NEC’s notice letter only one day before the lawsuit was filed.
Months before trial, in Peloton’s Q3 FY2026 Form 10-Q, Peloton told investors that the potential loss could be material, although it could not estimate an amount:
“At this time, the Company cannot estimate the precise amount of any reasonably possible loss, as the estimate would depend on numerous uncertainties, including the court’s rulings on the parties’ pending motions, but it is possible that any such amount could be material.”
Adaptive bitrate streaming has cost Peloton before. In 2023, the company paid DISH Network $75 million to settle a dispute over the same category of technology after the International Trade Commission ordered an import ban on Peloton hardware. Two more patent suits are currently pending against Peloton at the complaint stage, from Portus in May and Flow Motion Research and Development last week.
Both sides can file post-trial motions asking the judge to set aside or adjust the award, and the losing side can appeal to the Federal Circuit. Neither Peloton nor NEC had publicly commented on the verdict as of publication.
We will continue to monitor the case and share updates as they become available.
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