An administrative panel has found that a pair of Peloton Interactive patents shouldn't have been issued, giving what Chattanooga-based rival Echelon Fitness Multimedia termed "a big win."
"We've spent a lot of money fighting these guys," said Lou Lentine, chairman and chief executive of fitness company Echelon.
Lentine, in a telephone interview on Friday, said that legal action between the two companies is continuing related to other patent infringement cases, which Echelon also denies.
Peloton, which makes connected fitness bikes and treadmills, in 2019 sued Echelon Fitness in federal court in Delaware, alleging patent and trade infringement, false advertising and unfair business practices. The suit alleged that Echelon appropriated Peloton's intellectual property and flooded the market with cheap, copycat products.
But Lentine said then that there was no legitimacy to the lawsuit, and Echelon later filed a counterclaim against Peloton. Lentine said Peloton's suit was "an example of big business trying to intimidate a strong but young competitor."
Echelon later asked for a review of the two patents. The Patent Trial and Appeal Board found that Echelon had shown that claims in the two Peloton patents cover obvious inventions and are unpatentable, according to an order filed in the case this week.
Both of the patents related to a system and method for providing streaming and on-demand exercise classes.
Lentine said another Peloton patent involving the two companies comes up for review in March.
"We're very confident the patent review board sees a similar position on it," he said, adding that Echelon is spending millions of dollars in legal fees because of the disputes.
Meanwhile, Lentine said he's projecting Echelon will see about 43% growth in 2022. In 2020, he said Echelon revenues soared 1,000% as the coronavirus pandemic dragged on and people worked out at home. The company set up major relationships with "all the major retailers," Lentine said.
Last year, as the pandemic eased somewhat, the company grew about 65% as it became harder to compare revenue gains and many people returned to a more normal routine, he said.
Also in 2021, privately held Echelon moved into its new Chattanooga headquarters on two floors in Liberty Tower downtown.
"We're already running of out space," said Lentine late last year.
Lentine started the business in 2017. Today, the company employs nearly 250 people, about half of them in Chattanooga, according to Echelon.
Publicly traded Peloton has seen its market value drop by more than 77% since September. Company Chief Executive Officer John Foley said last week in a statement that it's taking "significant corrective actions to improve our profitability outlook and optimize our costs across the company."
Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318. Follow him on Twitter @MikePareTFP.