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Ninth Circuit:
Trademark Claims Against Peloton Over Use of ‘Bike+’ Fail
Opinion Says Consumer Confusion Is Unlikely, Even Though Both Entities Offer Biking Apps in Same Marketplace, Because Users Savvy Enough to Notice Producer’s Name Alongside Icon
By a MetNews Staff Writer
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Above are screenshots from a District Court order granting summary judgment to Peloton Interactive Inc. in a lawsuit accusing the company of trademark infringement. The one at left depicts how one of the plaintiff’s app is marketed, and the one at right shows the defendant’s branding. The Ninth U.S. Circuit Court of Appeals on Friday upheld a summary judgment in favor of the defendant, saying the plaintiff’s claims fail as a matter of law. |
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The Ninth U.S. Circuit Court of Appeals on Friday affirmed a judgment entered in favor of Peloton Interactive Inc. in a trademark suit accusing the exercise equipment giant of infringing on a trademark registered to another company by releasing a new version of its indoor cycling machine dubbed the “Peloton Bike+.”
In a memorandum decision signed by Circuit Judges Consuelo M. Callahan, Bridget S. Bade, and Lucy H. Koh, the court concluded that, even though both companies offer apps on an Apple platform, reasonably prudent consumers were not likely to be confused between the Peloton product and the exercise tracker “BIKE+,” because regular Internet users can readily distinguish domain names and the producer is identified alongside the icon in the online store.
World Champ Tech LLC (“WCT”) is a California-based fitness technology company founded in 2012 by professional cyclists James Mattis and Ted Huang and holds a U.S. Trademark Registration for the “BIKE+” mark which it says it has used continuously in commerce since 2014 in association with its mobile tracking apps that allow users to record and share data—including heart rate, speed, and distance—from cycling sessions.
Tracking is accomplished through integration with smartwatches and mobile devices.
Premium Version
Peloton announced in 2020 that it would be offering a premium version of its indoor cycling machine called “Peloton Bike+,” which also offers users the ability to track health metrics and biking data through a mobile app available on Apple Watches.
In February 2024, WCT filed a complaint against Peloton, asserting claims for trademark infringement under the Lanham Act as well as unfair competition under federal and California law. The plaintiff alleges that the use of the mark “Peloton Bike+” is likely to confuse consumers as to whether the defendant produces or sponsors WCT’s “Bike+” app.
The parties each moved for summary judgment and stipulated that each cause of action is based on alleged infringement based on a so-called “reverse confusion” theory, applicable when the second user of a mark so saturates the market that consumers are likely to mistakenly associate the original creator’s goods with the other company.
Magistrate Judge Laurel D. Beeler of the Northern District of California granted summary judgment to the defendant, finding that “confusion is possible but not probable” in the case.
Ninth Circuit’s View
Callahan, Bade, and Koh noted that the test for likelihood of confusion in trademark litigation is whether a “reasonably prudent consumer” in the marketplace is likely to be confused as to the origin of the good or service bearing the mark in question. They added:
“In a reverse confusion case like this one, “[t]he question…is whether consumers doing business with the senior user might mistakenly believe that they are dealing with the junior user.”
A non-exhaustive list of factors guides the analysis, including the strength and similarities of the marks, the proximity of the goods, the marketing channels used, and evidence of actual consumer confusion.
Noting that “even when certain factors weigh in the plaintiff’s favor, summary judgment is appropriate if those factors are ‘overwhelmingly offset’ by the remaining factors, the judges said “[t]hat is the case here.”
The panel said:
“The first two factors—mark strength and proximity of goods—weigh in WCT’s favor. For the first factor,…a jury could find that Peloton’s Peloton Bike+ mark is so commercially strong that it could overtake WCT’s mark….For the second factor, a jury could find that the parties’ products are intended for the ‘same class’ of consumers—those who bike as a form of exercise—and are ‘similar in use and function’—offering users the ability to track metrics while biking.”
Other Factors
They continued:
“But other factors overwhelmingly favor Peloton. Consider the third factor, which turns on the similarity of the marks ‘as they are encountered in the marketplace.’…[C]onsumers who encounter WCT’s mark primarily do so in the Apple App Store. There, Peloton’s app may appear alongside WCT’s app in search results, but the two apps bear no similarity in appearance, especially because the Peloton app does not use the term ‘Bike+.’ ”
Acknowledging that the use of a house mark, or branding including a company emblem or name, “can aggravate reverse confusion” in some cases, the court said that “this is not one of them.” The jurists wrote:
“The Apple App Store displays the app producer’s name alongside the app name and icon, which reduces the potential for any confusion as to who produces each app.”Callahan, Bade, and Koh considered whether a reasonably prudent consumer would take the time to distinguish between the two product lines. They remarked:
“When WCT applied for its trademark registration, it represented to the United States Patent and Trademark Office that its app ‘is not acquired through impulse…’; instead, consumers must complete the multi-step process of searching the Apple App Store, selecting the app they are looking for among competitor apps, and then entering a passcode or alternative method of authentication to confirm that they intend to download the app. Again, during this process, the Apple App Store displays ‘World Champ Tech’ as the producer of the Bike+ app. Accordingly, a reasonably prudent consumer would identify the Bike+ app as being produced by WCT, not Peloton.”
Expert Survey
They pointed out that WCT “has offered an expert survey finding a net confusion rate of 12%,” but commented that confusion will only be found likely in such circumstances if there is other evidence supporting the conclusion. In the present case, they explained:
“The products have coexisted in the marketplace for years, and hundreds of consumers have downloaded WCT’s Bike+ app during that time. Yet WCT has no evidence that any of them has experienced any confusion.”
Based on the record, the panel declared:
“Collectively, these factors make it such that no reasonable trier of fact could find that confusion is probable, so WCT’s claims fail as a matter of law.”
The case is World Champ Tech LLC v. Peloton Interactive Inc., 24-2266.
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