Peloton, New York, has settled its 16-month-long patent infringement lawsuit against competitor Flywheel Sports, New York, the company announced on Feb. 4.
Per the settlement, Flywheel acknowledged that its Fly Anywhere Bike infringed on Peloton patents and agreed to cease all instances of infringement within 60 days. Both companies are filing a joint motion to dismiss the case from Texas federal court. Flywheel has also withdrawn its proceedings against Peloton with the United States Patent and Trademark Office.
Peloton first filed the lawsuit in September 2018, specifically accusing Flywheel investor Michael Milken of attending a private investor conference in order to poach Peloton’s business and technology concepts.
"We're very excited to have registered a massive win in our fight to protect Peloton's intellectual property," Hisao Kushi, chief legal officer and co-founder of Peloton, said in a media release. "This result reinforces the strength of our patent portfolio and reaffirms our lead as an innovation company operating at the intersection of fitness, technology and content."
No additional financial stipulations were outlined in the companies' Feb. 3 settlement notice that was submitted in U.S. District Court for the Eastern District of Texas, Marshall Division.
Club Industry reached out to Flywheel for a comment on the settlement but didn't immediately receive a response.
In other news, Flywheel was acquired by New York-based Town Sports International (TSI) on Jan. 6 for a principal amount of $25 million. TSI ranked No. 7 on Club Industry’s Top 100 Health Clubs of 2019 list, reporting $443 million in 2018 revenue, and operates health clubs under the names New York Sports Clubs, Philadelphia Sports Clubs, Boston Sports Clubs and Washington Sports Clubs. Flywheel currently operates 29 cycling studios in more than a dozen states and also markets at-home bikes to consumers.
On Feb. 5, Peloton reported a quarterly revenue increase of 77 percent to $466.3 million while also posting $55.4 million in net losses and an adjusted EBITDA loss of $28.4 million.