Lululemon Sues Costco Over Alleged Knockoff Clothing Sales

Lululemon Athletica has initiated legal action against Costco, alleging that the wholesale retailer is selling unauthorized and unlicensed duplicates of its popular athleisure clothing items at significantly lower prices. The lawsuit, filed in the U.S. District Court for the Central District of California, claims that Costco has been trading on Lululemon's reputation and goodwill by offering knockoff versions of its patented designs.

According to Lululemon, Costco is known for using manufacturers of popular branded products for its private label Kirkland brand. However, the company and its manufacturers do not disclose the connection between them for many of the Kirkland-branded products. This lack of transparency, Lululemon argues, leads some consumers to believe that Kirkland-branded products are made by the authentic suppliers of the original products, a misconception that Costco does not attempt to correct.

Lululemon's lawsuit highlights several products that it claims are being duplicated by Costco, including the Scuba hoodies, Define jackets, and ABC pants. One specific example mentioned is the Hi-Tec Men’s Scuba Full Zip, which is priced at $19.97 on Costco’s website, compared to Lululemon's men’s jackets that cost over $100 each. Lululemon emphasizes its commitment to protecting its intellectual property rights and taking legal action when necessary to enforce them.

Costco, headquartered in Issaquah, Washington, has not yet responded to the allegations. Lululemon is seeking a jury trial and is requesting that Costco cease the sale of the allegedly infringing products. Additionally, Lululemon is pursuing unspecified monetary damages as part of its legal action.

This is not the first time Lululemon has been involved in a legal dispute over its intellectual property. In 2021, the company was in a similar dispute with Peloton. Two years later, the companies announced a settlement that included Lululemon becoming the primary athletic apparel partner to Peloton. This latest lawsuit against Costco underscores Lululemon's proactive approach to safeguarding its brand and intellectual property in the competitive athleisure market.