Two of the biggest retailers are locked up in a legal fight: Lululemon Athletica Inc. is suing Costco Wholesale Corporation for allegedly selling knockoff versions of its best-selling “stretchy pants.” In a lawsuit filed in the U.S. District Court for the Central District of California, Lululemon Sues Costco own private-label brand Kirkland Signature is selling a “carbon copy” of the yoga attire company’s products, infringing on trade dress protection and tricking customers.
Allegations of Infringement and Imitation
Lululemon said the dispute concerns some of the Kirkland Signature products that are “confusingly similar” to the company’s designs, the Scuba hoodie, ABC pants, and the Define jackets. The Lululemon pieces, which typically cost between $100 and $120, have become status symbols in the athleisure world for their fit, quality, and comfort. The Kirkland ones on the other hand, sell for a fraction of the price, and some counterfeit versions can go for as little as $20, posing a concern for Lululemon over brand depreciation and consumer confusion.
The company says Costco has “traded upon [Lululemon’s] reputation, goodwill and sweat equity” by selling unlicensed knockoffs that mimic the look and feel of its original items. In the complaint filed, Lululemon alleges that these products infringe both its intellectual property rights and federal and state trademark laws by creating the false impression that the knockoffs are either made by or authorized by Lululemon.
Brand Damage and Consumer Confusion
Lululemon contends that Costco is undermining its brand, which is based on exclusivity, innovation, and quality. The lawsuit argues that the selling of cheaper dupes dilutes Lululemon’s premium positioning, indicating to consumers that Lululemon’s goods are overpriced or can be easily copied. The company is also concerned that these knockoffs could confuse consumers when they are buying the products, again after purchase, as the consumers might, while wearing the product, believe that Lululemon made the items when they look alike and have similar technical elements.
A key legal principle in Vive’s case is “trade dress infringement,” that is, copying how a product looks or the overall impression it creates. Kirkland uses cuts and stitching patterns, places its zippers, and chooses its colors in ways that are so similar to Lululemon’s that it could only have been a matter of imitation, Lululemon argues. Side-by-side comparisons of the garments are mentioned in the lawsuit as evidence of this.
Legal Action and Requested Relief
Lululemon wants money for lost profits and damage to its reputation as well as an order from the court to prevent Costco from selling the products in question. The lawsuit requests a jury trial as well, which further emphasizes the seriousness of the allegations and the brand’s determination to prosecute its intellectual property rights to the fullest.
The athletic wear company said that it had sent cease and desist letters in the past to businesses selling similar knockoffs, including one to Costco. The current lawsuit claims Costco later continued to sell the products at issue despite having received those warnings. As of press time, Costco has not responded to the allegations or released a statement regarding whether it intends to contest the lawsuit.
A More Widespread Fashion Trend
It is a part of a broader trend in the fashion and retail world, where high-end brands have used the legal system to push back against fast fashion and budget knockoffs. The emergence of “dupe culture” on social media, in which influencers and users market low-cost versions of high-priced items, has amplified these battles. Lululemon’s lawsuit against Costco may signal how courts will treat cases where high-end retailers accuse discount brands of capitalizing on their aesthetic coattails.
It follows Lululemon’s earlier courtroom confrontation with Peloton, during which it accused the fitness brand of ripping off its women’s activewear line. That suit was settled out of court in 2022, and now Lululemon is signaling that it’s taking a hard line on guarding its brand going forward.
