Lululemon files lawsuit against Costco, claiming counterfeit clothes have been sold.
In a move to protect its intellectual property, Lululemon Athletica Inc. has filed a lawsuit against Costco Wholesale Corp., alleging that the retail giant has copied several of Lululemon's patented athletic wear designs.
According to market insights firm NIQ, private label product sales grew by 4.1% last year. However, Lululemon is seeking monetary damages and is requesting that Costco pull the products in question from its shelves.
The lawsuit claims infringement of design patents, trade dress, and use of trademarked colors. Lululemon accuses Costco of selling "knockoffs" or "dupes" of their signature apparel without authorization or licensing. The complaint references social media hashtags like #LululemonDupes that highlight the lower-priced copycat items.
Examples cited include Kirkland Signature and Danskin branded pieces, along with others such as Jockey and Spyder yoga jackets retailed by Costco. Lululemon alleges that Costco sources some products from the same manufacturers as Lululemon, strengthening claims of duplication.
From a legal standpoint, the claims are based on design patent infringement (which protects the ornamental design of a product) and trade dress infringement (protection of a product’s overall look and feel that identifies its source). Proving design patent infringement requires showing the copied features are ornamental and non-functional, a challenging standard since many activewear design elements like seams and gussets serve functional roles rather than purely aesthetic ones.
Trade dress infringement requires demonstrating that Costco’s products cause consumer confusion about the source, that Lululemon’s trade dress is distinctive and non-functional, and that the similarity is significant enough to mislead buyers. Courts often use factors such as the similarity of designs, marketing channels, buyer sophistication, defendant’s intent, and actual confusion evidence in trade dress cases.
Costco has not publicly responded to the lawsuit. Industry observers note that Lululemon has engaged in similar legal actions against copycat producers before, but the chance of a successful, lucrative outcome against a wholesale giant like Costco, which sells products at significantly lower prices, is uncertain.
Public opinion, according to a retail industry poll, leans heavily towards supporting Costco’s right to sell these alleged dupes, reflecting a common consumer tolerance for lower-priced look-alikes in apparel.
Meanwhile, Lululemon reported a 7% year-over-year gain in net revenue during the first quarter of 2025. For the full year, the company projects net revenue to land between $11.150 billion to $11.300 billion.
In a statement, a Lululemon spokesperson stated that the company takes the responsibility of protecting and enforcing its intellectual property rights very seriously. The outcome of this legal battle will hinge on how courts interpret these nuanced intellectual property protections in the apparel context.
- The private label product sales growth in the industry last year was 4.1%, however, Lululemon Athletica Inc. is seeking monetary damages and asking Costco Wholesale Corp. to remove certain products from their shelves, as they allege that these products are copies of Lululemon's patented athletic wear designs.
- Lululemon's lawsuit against Costco alleges design patent infringement and trade dress infringement, claiming that Costco has sold "knockoffs" or "dupes" of Lululemon's signature apparel without authorization or licensing.
- Public opinion in the retail industry polls leans towards supporting Costco's right to sell the alleged duplicates, reflecting a common consumer tolerance for lower-priced look-alikes in apparel, but the outcome of Lululemon's legal battle against Costco is uncertain.
