Peloton commenced an action in federal court in Texas claiming that Flywheel, which is in the same business, copied the Peloton bicycle by using confidential patents. The suit claims that Flywheel’s new bicycle uses Peloton patented technology to the extent that it displays live and archived cycling classes, tracks rider performance and compares at-home riders’ performance to others.
And guess who is in the middle of the exercise? Good ‘ole Michael Milken, the guru who famously pleaded guilty in 1990 to violating securities laws. According to the complaint, Milken, who has a multi-million dollar investment in Flywheel, approached Peloton and obtained information about Peloton’s technology and business strategy. Milken is not, however, named in the suit.
Parent litigation is generally extremely technical as the real question is always whether the alleged infringer wrongfully used, made or imported an invention from another. Here, tracking and comparing performance is certainly not novel. The real question is whether Milken, in his discussions with Peloton, obtained that detailed technology and provided it to Flywheel. While we certainly do not yet know his answer, it’s gonna be a tough one for Peloton to prove.