Peloton has put another court case & patent battle behind them, and was awarded $5.5 million in attorneys fees.
First, some backstory and information on the claims being made in this case. Around 2012, Peloton contracted with Eric Villency, who is also the CEO of Villency Design Group, to help design the frame of the original Peloton bike. Eric Villency’s contracted work with Peloton ran through 2016.
Then, in June 2016, Eric Villency created a new company (along with Joseph Coffey) called VR Optics. Shortly after being formed, in August 2016 VR Optics acquired a patent from Microsoft, which was rumored to possibly have patented some of the software features used in the Peloton bike – namely some of the live stream & user data tracking on the bike.
VR Optics then sued Peloton for patent infringement on this patent they just acquired – against the same company & bike that Eric Villency had just helped create. An important caveat is that the validity of the frame of the bike was never in question, the patent impacted only some of the streaming & software features.
After this suit was filed, Peloton then filed a counter claim of breach of duty against Villency Design Group & Eric Villency. Peloton claimed that Villency had discovered the Microsoft patent, or been told about it by a Peloton employee, while working with Peloton on the bike frame. And rather than let Peloton know about the possible issue – Villency instead waited until their contract expired, and created the new company for the sole purpose of suing Peloton.
The case has been working its way through the courts for the last few years. The core issue of the case was decided around a year ago – in April 2020, the court ruled that patent in question was invalid, thanks to prior art, and awarded Peloton a summary judgement of non-infringement. The court also ruled at the time that “VDG breached its contractual duty to defend Peloton against VRO’s claims.”
On April 2, 2020, this Court issued an Opinion and Order granting summary judgment in favor of Peloton on its claim that Villency Design Group, L.L.C. (“VDG”) breached its contractual duty to defend Peloton against certain intellectual property claims.
Rather than attempt to prove and request and be award for damages against VR Optics, Peloton instead had then requested that they be awarded attorney’s fees in the case. This week, the judge granted that request – awarding Peloton $4.3 million in attorney fees and $1.2 million in interest.
For the foregoing reasons, Peloton’s motion for attorney’s fees is GRANTED. VDG must pay Peloton $4,299,163.56, plus interest, for the reasonable attorney’s fees, costs, and expenses Peloton incurred in defending against VRO’s patent infringement claim and bringing its claims seeking declaratory judgment.
Following that ruling, the judge dismissed all other related claims in the proceeding, and closed the case.
This was first reported by Law360