World Champ Tech LLC v. Peloton Interactive, Inc.

Background

World Champ Tech asserted trademark-infringement and unfair-competition claims based on its “BIKE+” trademark. It said it developed a BIKE+ application released through the Apple store in 2014 and a BIKE+ version for the Apple Watch released in January 2021. It alleged that Peloton infringed the mark through advertising and sales of “Bike+” stationary bicycles beginning in 2020. Peloton contended that World Champ Tech had abandoned the mark and did not own it when Peloton released its bicycle, pointing to an apparent lack of marketing, updating, or modification of the application between September 2016 and January 2021.

The parties’ discovery dispute concerned how World Champ Tech’s source code would be handled under their stipulated protective order. The parties had previously agreed that they disagreed about whether source code was relevant and would supplement the order with provisions governing material designated “HIGHLY CONFIDENTIAL – SOURCE CODE.” World Champ Tech sought to use the Northern District of California’s model protective-order provisions for source code. Peloton argued that those protections were unnecessary because the source code had little value.

Court’s Analysis

The court concluded that the model protective-order provisions for source code should apply. It rejected Peloton’s argument that the proposed production methods would make it impossible to determine the date and extent of the relevant coding, noting that the model order permits review and searching at a specified location and that World Champ Tech offered to produce the code in hard copy or on an iPad configured to make copying difficult.

The court also rejected Peloton’s argument that the model order would undermine protections for the receiving party. It stated that the model order’s provisions for challenging confidentiality designations would still apply. The court declined to find, in a discovery dispute, that World Champ Tech’s source code lacked value because that value was disputed. It distinguished the cases cited by Peloton, including one in which the plaintiff had failed to allege that its source code had value and another involving a more burdensome acquisition bar.

The court found that World Champ Tech had modified the model order’s source-code provisions without adequate explanation. In particular, World Champ Tech proposed requiring review at a mutually agreed location accounting for counsel and experts being in different jurisdictions and coordinating production with depositions in the relevant jurisdiction. The court stated that the model order’s location provision should apply instead. It found the other proposed changes, including paper or iPad production at the receiving party’s expense, permissible.

Disposition

The model protective-order terms regarding source code apply. World Champ Tech’s proposed location and deposition-related modification does not apply, while the other identified production modifications are permissible. The order states that it disposes of Docket No. 68. The excerpt also includes a seven-day deadline but does not clearly identify what that deadline governs.

This was a discovery and confidentiality ruling; it did not resolve the parties’ underlying trademark or unfair-competition dispute.