Peloton Beats NordicTrack Maker’s Push to Bar Sales of Bike
(Bloomberg) -- Peloton Interactive Inc. beat back an effort by the maker of NordicTrack exercise bikes to block U.S. sales of its Bike+, as the rivals do battle in the hot home fitness industry.
Closely held Icon Health & Fitness Inc., which sued Peloton in October for patent infringement, “has failed to demonstrate a likelihood of success on the merits or irreparable harm,” U.S. District Judge Richard Andrews wrote in an opinion issued Monday in federal court in Wilmington, Delaware. Icon had asked the court to temporarily bar Peloton from selling the Bike+ with its Auto Follow feature, which automatically changes resistance levels during classes, while the case proceeds.
The conflict comes amid brisk growth in the home fitness market as consumers look for ways to stay fit, with many gyms across the U.S. closed or operating at diminished capacity due to the coronavirus pandemic.
During a December hearing on the preliminary-injunction request, Icon painted a picture of a two-player market in which the rivals are fighting for a long-term relationship with each subscriber. The company estimates it will retain a subscriber on its iFit platform for nine years. Peloton estimates a 13-year retention.
Lawyers for Peloton downplayed the Auto Follow feature at the hearing as limited in scope and argued its rival was wrong to assume that a user’s resistance on the Bike+ was actively controlled remotely. Lawyers for Icon told Andrews they were asking only that the feature be turned off until the dispute is resolved.
In his opinion Monday, Andrews said that Icon had “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.” But he said he didn’t believe such losses were “imminent” as a result of the bike’s release.
“Icon’s assertion that it is planning an IPO and planning to release new remote-control products is speculative and cannot serve as the grounds for finding irreparable harm without additional evidence,” the judge wrote.
Digging into the fine points of Icon’s claim, he said Peloton “has raised a substantial question as to whether the resistance on the Bike+ when using Auto Follow is controlled via locally stored information, and, assuming the existence of a packetized control signal, whether the Bike+’s red resistance knob is configured to effect a proportional change to the control signal.”
Peloton is “pleased” with the ruling that Icon “could not prove any likelihood of success on the merits,” said Steven Feldman, a lawyer for the company. Icon didn’t respond to an email seeking comment.
The two companies have clashed before. Peloton sued Icon in May, accusing it of copying its interactive fitness programs and its patented feature for making prerecorded online classes seem live. Peloton said at the time that Icon had “attempted to free ride off Peloton’s innovative technology.” A jury trial in that case, also in Delaware, is set for October 2022.
Monday’s ruling doesn’t mean the bike will flow freely to the market. Peloton said on Feb. 5 in its quarterly earnings report that although it had “significantly increased Bike and Bike+ production over the last several months,” supply remained “constrained,” with “longer than acceptable wait times.”
The case is Icon Health & Fitness Inc. v. Peloton Interactive Inc., 20-cv-1386, U.S. District Court, District of Delaware (Wilmington).
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