Last October Icon Health & Fitness, who own the NordicTrack line of Treadmills & bikes, had sued Peloton for patent infringement. They were making two main claims against the Peloton Bike+. As part of the suit, they asked the judge for an injunction that would prevent Peloton from continuing sales of the Bike+ while the lawsuit proceeded.
The case is in progress in the US District Court for the District of Delaware, and has a case number of 20-cv-1386-RGA. The judge overseeing the case, Richard G. Andrews, made a ruling yesterday denying ICON’s request for an injunction while the case proceeds:
As I have concluded that ICON has failed to demonstrate a likelihood of success on the merits or irreparable harm, I will not address the remaining factors. ICON’s motion for a preliminary injunction is DENIED
ICON is alleging that the Bike+ infringes on its patents related to the auto-follow and auto-resistance features. At a high level, the patent requires the control to be done by a “remote source over a network”, and that the amount of change done be a “proportional change”
Peloton had argued before the judge that the metrics data that allow the Bike+ to control the auto-follow feature is downloaded as a single file before the workout begins, and was therefore not a “remote source”. ICON had then done a demonstration of disconnecting the Bike+ from the network mid-workout, and Auto Follow had stopped working. However, the demonstration did not do enough to show this was a control signal being cut off:
While this test undermines Peloton’s assertion that the Auto Follow feature is run entirely locally, I do not believe that it necessarily demonstrates the existence of a packetized control signal. Dr. Easttom concludes that Auto Follow “clearly requires something from the video and Peloton’s remote servers to operate” but does not state that the “something” is a control signal.
The second argument being made was around whether Auto Follow was a “proportional change”. Peloton argued that changing the resistance is not a “proportional change” to the suggested metrics the bike was sending, but rather a change in the actual resistance in the bike, which the judge tended to agree with.
The judge then went on to say that ICON is a direct competitor to Peloton, however, the merits of the case don’t require an injunction barring the sale while the case continues, as any losses can later be calculated for potential future penalties.
On this record, I believe that ICON has established that it competes directly with Peloton and that a loss of market share, and thus subscribers, to Peloton has the potential to be damaging due to the longevity of Peloton’s subscriber base. However, I do not believe that ICON has demonstrated that such losses are imminent as the result of the release of the Bike+ or noncompensable. ICON’s assertion that it is planning an IPO and planning to release new remote control products (D.I. 9 at 12) is speculative and cannot serve as the grounds for finding irreparable harm without additional evidence.
Note that this ruling does not mean the case is over. The court will continue to hear arguments and look to make a final ruling in the case. It simply means that Peloton is allowed to have the Bike+ on the market while the sale continues.
Peloton & ICON also remain in a separate lawsuit over whether a contractor for ICON stole trade secrets.
Peloton also has a lawsuit open against ICON alleging ICON is infringing on some of Peloton’s patents.