Peloton Interactive has been hit with a patent infringement lawsuit from a company credited with sparking the world’s indoor cycling craze over half a century ago.
Mad Dogg Athletics (MDA), which brands itself as ‘the creator of the Spinning and indoor cycling category’, filed the lawsuit against Peloton in the US District Court for the Eastern District of Texas on Monday.
The suit obtained by DailyMail.com alleges that Peloton infringed upon two of MDA’s patents that are ‘directed to core features of an exercise bike designed to bring the experience of an instructor-led class into the rider’s home’.
It was filed three days after it was announced that Peloton, which burst into the at-home workout market in 2012, will be joining the Nasdaq 100 index.
The company’s sales have grown by 172 percent this year as its stationary bike – which retails from $1,895 – became wildly popular when coronavirus-related gym closures forced many Americans to start working out at home.
Peloton Interactive was hit with a patent infringement lawsuit from competitor Mad Dogg Athletics – the founder of Spinning – on Monday (file photo)
Los Angeles-based MDA was founded by cyclists and entrepreneurs John Baudhuin and Johnny Goldberg in 1994 to develop their Spinning® indoor cycling program and Spinner® line of indoor cycling bikes.
Fourteen years later it introduced its eSpinner® bike – the world’s first to include a touch-screen display which allowed users to access coaching from instructors and heart-rate monitoring.
‘We revolutionized the indoor cycling category in 2008 with the eSpinner® bike,’ MDA co-founder Baudhuin, who also serves as CEO, said in a news release about the lawsuit.
‘Peloton has built its business by freeriding on Mad Dogg’s patent-protected innovations.’
‘Peloton cannot compete in the category that Mad Dogg created by trampling on Mad Dogg’s rights.’
MDA introduced its eSpinner® bike – the world’s first to include a touch-screen display which allowed users to access coaching from instructors and heart-rate monitoring – in 2008
The lawsuit accuses Peloton of infringing on US Patent Nos. 9,694,240 (2017) and 10,137,328 (2018) with the models it brought to the market years after MDA broke it open.
‘The Peloton Bike and the recently released Bike+ (collectively, the “Peloton Bikes”) incorporate MDA’s patented technology covering core features of a stationary exercise bike designed to simulate an instructor-led class in the rider’s home, without the right or authority to do so,’ the complaint states.
‘Without permission from or compensation to MDA, Peloton has built a multi-billion dollar business based in large part on MDA’s pioneering patented inventions in the indoor cycling market that MDA founded over 25 years ago.’
The suit includes several photos of Peloton bikes with annotations pointing out which design components are in alleged violation of MDA’s patents.
It seeks a judgment confirming patent infringement as well as monetary damages to be determined during a trial.
Los Angeles-based MDA was founded by cyclists and entrepreneurs John Baudhuin (left) and Johnny Goldberg (right) in 1994 to develop the Spinning® indoor cycling program and Spinner® line of indoor cycling bikes
MDA has weathered steep financial decline over the past several years, landing in bankruptcy court in August 2019 when it filed a Chapter 11 petition to restructure its operations and debt.
It posted its first-ever annual loss in 2018 after being ordered to pay a $1.28million judgment to Bodyblade, which sued MDA for violating a license agreement.
The dispute led to MDA falling out of compliance with its loan from Union Bank in the spring of 2019.
On top of its legal troubles, MDA has struggled to keep up with competitors that operate with lucrative subscription plans.
Meanwhile Peloton saw a meteoric rise that was compounded when the coronavirus pandemic hit, ushering in stay-at-home orders for millions of Americans who then went looking for new workout opportunities.
Peloton has reportedly brought in revenue upwards of $1.8billion this year, and the company’s daily stock price climbed above $100 in September.
The company’s stock price stood at $121.91 after trading closed Monday – up 144 percent from June.
Peloton’s sales have grown by 172 percent this year as its stationary bike – which retails from $1,895 – became wildly popular when coronavirus -related gym closures forced many Americans to start working out at home. The company’s stock price (pictured) stood at $121.91 after trading closed Monday – up 144 percent from mid-June
But soaring demand during the holiday season has caused headaches for the company as customers complain of months-long delays in deliveries that have caused some to cancel their orders and defect to rival brands.
Last month Peloton told The Wall Street Journal that the delays ‘are primarily due to shipping logjams, particularly at ports as the bikes are transported to the US from manufacturers overseas’.
A spokeswoman stated: ‘The wait times right now are not how we want people to experience Peloton’.
Peleton bosses stated in a recent letter to shareholders that they were ‘doing everything we can to get our products to our prospective Members as quickly as possible’.
Peloton has not publicly responded to MDA’s lawsuit and did not immediately return DailyMail.com’s request for comment.