Lululemon Sues Costco Over Alleged Sale Of Fashion Dupes

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(RTTNews) - Lululemon Athletica Inc. has filed a lawsuit against retail major Costco Wholesale Corp. for allegedly selling knockoff or dupe versions of its popular fashion products, including pants, hoodies and jackets, at significantly cheaper price than its originals.

In a lawsuit filed in California, the athletic apparel maker said, "Costco has unlawfully traded upon Plaintiffs' reputation, goodwill and sweat equity by selling unauthorized and unlicensed apparel employing knockoff, infringing versions of Plaintiffs' well-known trade dress and design patents..."

The company seeks to recover fully for the monetary damages and significant harm to lululemon's brands and reputation caused by Costco.

According to Lululemon, Costco has imported into the U.S., distributed, advertised, marketed, offered for sale and/or sold at least the infringing products identified under the names Danskin Ladies Half-Zip Hoodie, Danskin Half-Zip Pullover, Jockey Ladies Yoga Jacket, Spyder Women's Yoga Jacket, Hi-Tec Men's Scuba Full Zip, and Kirkland 5 Pocket Performance Pant, under its in-house brand label Kirkland, significantly cheaper than its originals.

Lululemon alleges that Costco leads at least some consumers into believing that its private label, KIRKLAND-branded dupes are in fact manufactured by the authentic supplier of the original products.

The athletic and lifestyle apparel company noted that it wrote to Costco on November 11, 2024 about its infringement of lululemon's intellectual property, including the SCUBA Mark and certain U.S. Design Patent Nos.

Costco subsequently removed at least some of the products that infringed lululemon's SCUBA Mark, but later began selling the infringing Hi-Tec Men's Scuba Full Zip.

According to Lululemon, one of the purposes of selling "dupes" is to confuse consumers at the point-of-sale and/or observers post-sale into believing that the "dupes" are its authentic products when they are not.

Lululemon accuses that these dupe products infringe its intellectual property rights and damage its hard-earned reputation and immense goodwill. The company said it has used various methods to remove the infringing products from the market, including sending cease and desist letters to companies, including Costco, who, through the advertising or sale of dupes, infringe its intellectual property.

Lululemon said it filed the lawsuit to enforce its intellectual property rights in court.

In 2021, Lululemon had sued Peloton for alleged sale of dupes, but later reportedly partnered to sell branded clothing.

In early June, Lululemon's shares had plummeted significantly after posting weak first-quarter net income and trimmed fiscal 2025 view, despite a 7% rise in quarterly revenue, raising investor concerns about profitability and margin pressures.

Calvin McDonald, Chief Executive Officer, then stated, "In the first quarter, we achieved growth across channels, categories, and markets, including the U.S., reflecting the continued strength and agility of our business model..... As we navigate the dynamic macroenvironment, we intend to leverage our strong financial position and competitive advantages to play offense, while we continue to invest in the growth opportunities in front of us."