Tuesday, September 14, 2021

Peloton's innovation claims were puffery, but music ads were a problem

Peloton Interactive, Inc. v. Icon Health & Fitness, Inc., 2021 WL 2188219, No. 20-662-RGA (D. Del. May 28, 2021)

The parties “compete in the at-home fitness market and offer products that allow consumers to attend live and on-demand fitness classes from home.” They’re fighting over cross-allegations of patent infringement, violation of state deceptive trade practices acts, and violations of the Lanham Act. I’m only addressing ICON’s counterclaims for false advertising, not the patent part of the ruling.

ICON counterclaimed that Peloton has made false claims in advertisements regarding its status as an innovator and as a tech company, e.g., that it was a “very hardcore technology company. We make a tablet computer better than apple ... We are as hardcore of a tech shop as anything in NYC right now.” Peloton also stated that was Bike is the “first of its kind.” ICON said this was false advertising, particularly because Peloton licensed the relevant technology from ICON. “Innovator” and “hardcore technology company” were non-actionable puffery. So was “first of its kind,” apparently for vagueness/bluster reasons.

ICON also challenged statements by Peloton’s CEO implying that Peloton has no competitors, such as “Nobody else provides them, so we’re kind of a category of one.” These too were broad, generalized claims of superiority without any reference to a specific product or characteristic.

Finally, ICON alleged that Peloton engaged in a misleading, bait and switch advertising scheme with respect to the availability of music on its platform. Though none of the cited ads referenced any artist or song in particular, the court understood ICON to be alleging “that the playlists linked in the Instagram posts contained music that Peloton lacked a license to or soon removed from its platform.” Peloton rejoined that its challenged Instagram posts “advertise only the availability of Peloton’s playlist feature.” These claims did survive. “Telling consumers that they can ‘find the perfect tunes for [their] on demand ride[s]’ and ‘see the artists and songs powering your on-demand rides’ and linking to specific playlists reasonably suggests that the songs contained in the playlists are available on Peloton’s platform.”

State-law claims were treated similarly.

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