Lululemon sues Costco for allegedly selling clothing knock-offs

Globe and Mail

13 hours ago

Lululemon Athletica Canada Inc. LULU-Q is accusing Costco Wholesale Corp. COST-Q of infringing on its intellectual property by selling knock-offs of some of its most popular products.
A lawsuit filed in a California court recently alleges Costco sells dupes of Lululemon's Scuba hoodies and sweatshirts, Define jackets and ABC pants.
Some of the alleged fakes Vancouver-based Lululemon identified are sold under Costco's private label Kirkland, but others are made by manufacturers Danskin, Jockey and Spyder.
'Some customers incorrectly believe these infringing products are authentic Lululemon apparel while still other customers specifically purchase the infringing products because they are difficult to distinguish from authentic Lululemon products, particularly for downstream purchasers or observers,' the lawsuit says.
Lululemon alleges these scenarios take advantage of patents it holds, as well as the reputation and goodwill it has built with customers.
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In its 49-page court filing, Lululemon says it tried to address the dupes by sending Costco cease and desist letters but is now asking a court to step in.
Lululemon has requested the matter be heard by a jury trial, which it wants to order Costco to cease manufacturing, importing, marketing and selling the alleged dupes.
It also wants the Washington-based retailer to remove any instances where it was advertising alleged dupes online or in print and is asking the court to require Costco to cover any lost profits Lululemon incurred from the products.
Costco did not immediately respond to a request for comment. It has yet to file a response to Lululemon's lawsuit.
Dupes have become incredibly popular in recent years as shoppers looked to cope with inflation and a global trade war by seeking products mimicking the originals made by name brands.
The phenomenon has gained traction online in particular, with social media accounts sharing the best dupes they've found.
While knock-off cosmetics are especially popular, Lululemon has also become a target because it sells its athletic wear at higher prices, which some customers find unattainable.
The lawsuit comes weeks after Lululemon said it would try to weather new and possibly incoming tariffs with price increases that will be 'modest in nature' and applied only to a 'small' portion of its products.
The brand has been working to bounce back from a lack of newness that disappointed consumers last year and earlier this year.
Newness – how fresh a brand's products and styles appear to consumers – is one of the key ways retailers draw in customers.