Peloton Hit With Patent Infringement Lawsuit by NordicTrack Maker - TheStreet

Peloton Hit With Patent Infringement Lawsuit by NordicTrack Maker

Peloton is sued by Icon Health & Fitness, the maker of the NordicTrack bike.
Author:
Publish date:

Peloton Interactive  (PTON) - Get Report was sued Thursday by Icon Health & Fitness, the maker of the NordicTrack bike, for patent infringement, the latest salvo in the ongoing legal battle between the two companies.

Separately, Bank of America raised its share price target for Peloton to $150 from $116.

Shares of the New York-based exercise-equipment-and-software company were climbing nearly 4% to $136.66.

Icon filed a lawsuit in a Delaware district court based on two features that Peloton added to an exercise bike released in September, Bloomberg reported: a swiveling touchscreen and the ability for the bike to automatically change resistance levels during classes.

Icon charged that it was issued a patent for the resistance level feature, which Peloton calls Auto-Follow, in 2007 and a second issued last year that allows for a seamless mix of aerobic and anaerobic exercise. 

Today’s filing is nothing more than a continuation of the litigation that Peloton filed against ICON earlier this year, and is a retaliatory filing intended to deflect attention away from ICON’s blatant infringement of Peloton's leaderboard technology and other deceptive practices,” Peloton’s litigation counsel, Steven Feldman said in a statement. “We will vigorously defend this case in court.”

The two companies have clashed before. Peloton sued Icon in May, claiming that the company copied its patented feature for making prerecorded online classes seem live. 

Peloton said at the time that Icon “attempted to free ride off Peloton’s innovative technology.” Icon had previously sued Peloton when its first bike was launched and again when Peloton launched its first treadmill.

Home fitness has grown dramatically during the coronavirus pandemic, which has forced gyms to close or limit their service.

Meanwhile, Bank of America analyst Justin Post reiterated his buy rating of Peloton and boosted his price target to $150,.

"Covid cases in both the U.S. and Europe have increased as the weather has turned colder, which we expect to create incremental demand during Peloton’s peak season," Post said in an investor's note. "We continue to anticipate a strong tread launch in the Winter that will expand the Street’s perception of Peloton’s TAM (Total Addressable Market)."

With rising Covid cases worldwide, Post continued, "we think elevated health concerns and new product launches could drive strong holiday demand & continued upside to Street estimates."

On Wednesday, Truist Securities analyst Youssef Squali raised his share-price target on Peloton to $144 from $115. He has a buy rating on the stock.