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Nike Has a Problem with Lululemon

First, Peloton sued. Then Nike added to Lululemon’s mounting legal woes.

On Wednesday, Nike filed a lawsuit going after the yogawear specialist’s digital fitness play in a maneuver that one intellectual property expert billed as potential legal overreach.

The Oregon sportswear giant, a self-described “leader in digital sport innovation,” accused Lululemon of infringing on six of its patents via Curiouser Products Inc., better known as Mirror—the “ultimate studio”digital fitness system it paid $500 million to acquire during the at-home workout boom in the summer of 2020.

Nike’s complaint claims Lululemon’s activities “making, using, selling, offering to sell, and/or importing” the Mirror digital workout system and its apps violate six patents issued to the athletic titan between 2013 and 2021. Documents filed in a Manhattan federal court point to digital achievements and accolades dating back to “at least”1983, when a Nike patent application covered a device measuring key running health metrics such as calories burned and speed traveled. Since the ‘80s, Nike said it has continued to flex its digital muscles, rolling out the Nike+ iPod system, Nike+ FuelBand, and Nike+ SportWatch—all fitness-tracking devices.

The 2012 arrival of Nike+ Kinect, an Xbox 360 fitness video game, introduced the gamification factor, allowing users to “compete with others with NikeFuel points,”according to the complaint. Nike also operates a suite of mobile apps including SNKRS, where consumers can access exclusive, limited-time merchandise.

The suit, however, dives into explicit detail about seemingly mundane aspects of Nike patent 8,620,413, which in layman’s terms essentially covers a device measuring the heart rate of a person exercising at various intensities. Which is precisely why a court could decide that Nike’s complaint could be “overly broad,” Mark Brutzkus, a partner at Stubbs Alderton & Markiles, told Sourcing Journal.

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“It seems like the two big issues are that the technology enables users to compete with each other and record their own performance,” he said, noting that companies like Peloton and NordicTrak sell products employing similar features.

The lawsuit could suggest that Nike might be coming out with its own digital workout system and is “rattling the competition,” Brutzkus said.

Mirror Mirror

Though Nike brand protection vice president Brian Fogarty sent Lulu a cease-and-desist letter on Nov. 3, the Vancouver company’s Dec. 10 response dismissed claims that the Mirror and its related apps infringed on any of the six patents in question. “Lululemon is open to discussing this matter further to the extent necessary to resolve it,” Diek Van Nort, partner at Lululemon counsel Morrison & Foerster, wrote.

Unable to settle the affair, Nike, which didn’t immediately respond to a request for comment, is seeking a jury trial, monetary damages and a “judgment and order permanently enjoining Lululemon” from “from directly or indirectly infringing the Asserted Patents.”

Many consumers put their dollars into workout-related products during the pandemic shutdowns of 2020, with NPD data showing health and fitness equipment sales more than doubling to $2.3 billion from March to October that year. Still, many people returned to their usual gym routines once covid infection rates began to let up, Brutzkus said. Omicron notwithstanding, the timing of Nike’s complaint is “a little confusing, given what’s going on in the marketplace,” he added, pointing to a general desire for a return to normal—which for many means not having to work out in the same place where they eat, sleep and hunch over their laptops.

Should a judge side with the plaintiff in the lawsuit, that would mean “everyone’s infringing” on Nike’s territory, Brutzkus said.