Dish sues Peloton, Lululemon, Icon over streaming technology
Dish Network Corp. and its Sling TV unit filed lawsuits accusing three of the biggest players in streaming at-home fitness programs of infringing patents for technology that improves the quality of video content over the internet.
The suits, filed Tuesday in federal courts in Texas and Delaware, accuse Peloton Interactive Inc., NordicTrack maker Icon Health & Fitness Inc. and Mirror owner Lululemon Athletica Inc. of using Dish’s patented technology that “allows Internet users to stream content from across the world in real time at the highest possible quality.”
Separately, Dish and Sling filed a complaint with the U.S. International Trade Commission in Washington, seeking to block U.S. imports of products including Peloton stationary bikes, NordicTrack treadmills and Mirror workout panels.
The patents cited in the lawsuits relate to ways of improving online video quality, particularly when users do things like fast-forward or rewind programs. They also allow for browsing of multiple streams without hiccups and adjust for a user’s bandwidth. Sling said it uses the technology in offering subscriptions to live TV channels over the internet.
The Texas complaint targets Peloton’s app and its Bike and Tread products. Dish cited Peloton’s second corporate headquarters and showroom in Plano for filing the lawsuit in Marshall, a district whose courts are widely considered friendly to patent owners.
In Delaware, Dish targeted Icon’s iFit software and its NordicTrack, ProForm and Freemotion brands of fitness equipment, which include stationary bikes, treadmills, elliptical and strength trainers, rowing machines and flat-panel devices. Dish also said hundreds of Lululemon stores that primarily sell yoga, dance and running clothes will double as Mirror showrooms by the end of 2021, after Lululemon bought Mirror last summer for $500 million and announced plans to invest in expanding sales.
A Peloton spokesperson had no immediate comment on the suit. Representatives of Icon and Lululemon didn’t immediately respond to requests for comment.
According to the complaints, the streaming technology was developed by Move Networks Inc., which was acquired by Dish in 2010. Dish sued Spanish-language TV broadcaster Univision Communications Inc. in 2019 over some of the same patents before settling later that year.
Dish is seeking damages from sales of streaming services that it says infringe its patents, including cash compensation for lost sales. It also wants the courts to issue orders blocking further unauthorized use of the technology.
In its petition with the trade agency, Dish said consumers won’t be harmed by an import ban because there are plenty of other products that don’t infringe its patents. Icon, for instance, “could simply revert back to selling” older products. As for Mirror, “customers of these products could just as easily exercise in front of their existing television” such as one with a Dish set-top box. The Sling TV software can “replicate the streaming-while-exercising experience,” Dish said.
Subscriber losses at Sling
In March, Comcast Corp. and The Teaching Company, which produces The Great Courses streaming content, filed a lawsuit seeking a court ruling that offering the educational programs online didn’t infringe one of the patents cited in the Peloton case, along with three others in the same field.
Comcast is leading the case in Denver on behalf of its customer, saying “Dish and Sling have begun a litigation campaign asserting a portfolio of outdated patents that they themselves did not invent but have acquired” and that it’s “created a cloud of uncertainty” over Comcast’s Cloud Video Platform.
Sling, which began in 2015, said it now has more than 2.474 million subscribers. But recent growth in streaming has fueled cord-cutting across all pay-TV services, which led to subscriber losses at Sling last year, and the trend could continue, Bloomberg Intelligence analyst John Butler wrote in a March 31 note.
Sling still represents about 22% of Dish’s video subscriber base, Butler said, but “its loss of 118,000 users in 2020 suggests the market is saturated.” AT&T Now was historically Sling’s closest rival, but “YouTube TV has grown into a bigger threat, in our view.”