Peloton Interactive, Inc. v. Lululemon Athletica Canada, Inc.

Peloton Interactive, Inc. (plaintiff) was a leading interactive fitness platform. In 2016, Peloton entered into a cobranding agreement with Lululemon Athletica Canada, Inc. (defendant), an activewear company. Under the agreement, Peloton sold Lululemon apparel cobranded with Peloton’s name. In 2021, Peloton ended the relationship and launched its own apparel brand. On November 11, 2021, Lululemon sent Peloton a cease-and-desist letter alleging that several Peloton apparel items infringed Lululemon’s patents and trade dress. The letter demanded that Peloton stop the alleged infringement and respond by November 19, 2021, or face legal action in federal court for patent and trade-dress infringement as well as trade-secret misappropriation. Peloton requested, and Lululemon granted, an extension of the response deadline to November 24. However, rather than responding to Lululemon’s letter, Peloton filed this declaratory-judgment action on November 24, 2021, seeking a declaration that it had not infringed Lululemon’s patents or trade dress, that the patents were invalid and unenforceable, and that Lululemon had no protectable trade-dress rights in the disputed designs. Five days later, on November 29, Lululemon filed a complaint for patent and trade-dress infringement in the United States District Court for the Central District of California. In the present action, Lululemon moved to dismiss, arguing that Peloton’s suit was an improper anticipatory declaratory-judgment action.