Peloton and Lululemon are in a legal tussle over who owns athleisure

• Peloton filed a lawsuit against Lululemon after Lululemon threatened to sue the fitness company.
• The lawsuit stems from Peloton's new apparel line, which launched in September.

Peloton is suing Lululemon after the apparel company threatened legal action over Peloton's new clothing line.

Peloton filed a lawsuit in New York federal court on Wednesday, asking the court to declare that Peloton has not infringed on multiple Lululemon clothing patents and to find that several of Lululemon's patents are invalid unenforceable.

The lawsuit stems from a spat between the two fitness companies that began earlier this month. Peloton $4 in September, an array of Peloton-branded clothing and accessories made in-house.

Peloton had previously sold other companies wares, like Nike and Adidas, and had a co-branding deal with Lululemon, a deal that it terminated for being "burdensome and time-intensive" amid mounting customer demand, Peloton said in the suit. The suit claims that Peloton's break-up with Lululemon was amicable at the time, and that the company didn't have any objections to Peloton terminating the deal or deciding to sell its own apparel.

But in November, Lululemon's lawyers sent a cease-and-desist letter — a copy of which was viewed by Insider — alleging that five of Peloton's products, including a pair of its $4 and a style of its $4, infringed on Lululemon's patents. Lululemon also claimed that a pair of Peloton's leggings infringed on the "trade dress" of $4 — trade dress is a broad trademark law that extends to the look and feel of a garment.

Lululemon said that Peloton's offerings are "likely to confuse the relevant public and severely damage Lululemon's hard-earned reputation, goodwill, and its iconic brand."

The letter demanded that Peloton stop selling those items immediately and hand over all of the information it has obtained about Lululemon's products. Lululemon threatened legal action if Peloton refused to comply.

But Peloton says that Lululemon's claims lack merit because both companies' logos and brand identities are "distinctive and well-recognized" and easy to tell apart among both brands' "sophisticated consumers." What's more, Peloton said, "Lululemon's claimed design patents are invalid because, at a minimum, they are anticipated and/or obvious and, thus, cannot be infringed upon."

In a statement to Insider, a Lululemon spokesperson doubled down on its claims that Peloton has infringed on its design patents.

"We have requested that Peloton cease and desist selling a number of styles of apparel which we believe infringe upon Lululemon's design patents. We will defend our proprietary rights, to protect the integrity of our brand, and to safeguard our intellectual property," the spokesperson said.

While Peloton is known for its connected fitness equipment, like its $2,500 bike and treadmill, apparel has increasingly become a bigger part of Peloton's business. CEO John Foley said in October that the company had sold 600,000 branded apparel items that quarter alone, $4.

And partnerships like the Lululemon deal may become a thing of the past for Peloton. During the launch of the company's private label line, a spokesperson $4 that Peloton is "very much focused on launching and continuing to grow Peloton Apparel" rather than launching new co-branded collections.