Can Peloton Sue Over Its ‘And Just Like That’ Appearance?

This article contains spoilers for the premiere of “And Just Like That” on HBO Max.

Peloton, a maker of high-end exercise equipment, was just as surprised as you were by its appearance on “And Just Like That,” the new HBO Max limited series that picks up the story of “Sex and the City.”

At the end of the first episode, Mr. Big (Chris Noth), the on-again-off-again love interest of Carrie Bradshaw (Sarah Jessica Parker), clips into his Peloton stationary bike for his 1,000th ride. Shortly after he hops off the bike, he has a heart attack and dies.

After the shocking ending, we couldn’t help but wonder: Are companies usually in the dark about how their products will be used in a movie or TV show, as Peloton reportedly was? What does the typical product-placement agreement look like? And if a company is particularly upset with how its product is portrayed, does it have any legal recourse?

So, can Peloton sue?

According to Nancy C. Prager, an intellectual property and entertainment lawyer, there are two types of product-placement agreements: one in which a company pays to be featured in show or movie, and another in which a production company procures a trademarked product to be used onscreen.

Peloton declined to state on the record whether it was involved in any formal product-placement agreement, but if a production company wants to use a trademarked product, Ms. Prager said, it must get a special license to show the product and brand logos. (In the episode, the Peloton logo is clearly visible on Mr. Big’s bike, and the instructor video closely resembled a real Peloton course.)

Ms. Prager explained that under trademark law, a principle known as nominative fair use allows production companies to use a trademark as long as the product is shown being used in a way consistent with the original trademark.

“Nominative fair use does not to apply, though, when you use the protected mark in a way that disparages the mark or the brand,” Ms. Prager said. HBO “tarnished Peloton’s good will to consumers,” she added, noting that Peloton products purport to make their customers stronger and healthier.

“The tarnish can be evidenced by the stock price plummeting,” she added, referring to the 11 percent drop in Peloton stock overnight after the episode aired. The stock’s value continued to fall on Friday.

In Ms. Prager’s view, that means Peloton could reasonably consider litigation, especially if HBO did not disclose the story line involving the product.

“It was a misstep that Peloton wasn’t fully aware of the script,” said Stacy Jones, the chief executive and founder of Hollywood Branded, a marketing and branding agency in Los Angeles.

Peloton did not know how the bike or its instructor Jess King would be featured in the show, according to a report in BuzzFeed News. Ms. Prager and Ms. Jones agree that withholding those details leaves HBO in murky legal territory.

“The production forgot that product placement is supposed to be mutually beneficial, and they did not put their thinking cap on about the damage that this would cause the brand,” Ms. Jones said.

This seems like a lot of trouble. Why bother with product placement?

“Think of product placement as an alternative form of advertising,” David Schweidel, a professor of marketing at Emory University Goizueta Business School, said on Friday.

In recent years, companies have been seeking out product-placement agreements more than ever, he said. The increased use of streaming platforms means viewers are seeing fewer commercials, driving companies to make greater use of product-placement deals to promote themselves.

“If I can’t reach my customer base with a traditional television commercial anymore, I take the product in the program itself,” Professor Schweidel said. “Then, they can’t avoid it.”

He estimated that product-placement advertising was worth well over $20 billion in 2021.

For production companies, the arrangements can be mutually beneficial, since featuring recognizable brands can make a show more realistic, Ms. Jones said.

In this particular case, the inclusion of Peloton was integral to advancing a story line. “Peloton provided a solution to their problem,” she said.

Can HBO protect itself?

Usually when a company is so unhappy with how its product has been portrayed that the idea of litigation is floated, “TV shows claim that it’s a parody, that viewers obviously knew that this was fictional,” Beth L. Fossen, an assistant professor of marketing at the Kelley School of Business at Indiana University, said on Friday.

That approach usually works for shows like “Saturday Night Live,” she said.

But given that Peloton was the subject of unfavorable headlines this year about a child dying in an accident involving one of its treadmills, the story line may have “hit a little too close to home” for that argument to work, Professor Schweidel said.

At least for the time being, it seems that Peloton is uninterested in pursuing litigation. In a statement on Saturday, Dr. Suzanne Steinbaum, a cardiologist on Peloton’s health and wellness advisory council, noted that “Mr. Big lived what many would call an extravagant lifestyle — including cocktails, cigars and big steaks — and was at serious risk as he had a previous cardiac event in Season 6.”

Dr. Steinbaum said that Mr. Big’s lifestyle choices, perhaps in conjunction with a family history of heart disease, were most likely the cause of his death.

In fact, she speculated, “riding his Peloton bike may have even helped delay his cardiac event.”