In a developing legal clash between two retail giants, Lululemon has filed a lawsuit against Costco Wholesale Corp., accusing the bulk retailer of selling unauthorized knockoff versions of its premium athleisure products under Costco’s private-label brand, Kirkland.
Lawsuit Alleges Intellectual Property Infringement
The lawsuit, filed in a California federal court, claims Costco is marketing and selling apparel that closely resembles Lululemon’s high-end items, including its signature $128 pants and $118 Scuba hoodies, at dramatically lower prices. For example, a Costco Kirkland-branded hoodie allegedly mimicking Lululemon’s Scuba design is reportedly priced as low as $8.
According to court documents, Lululemon alleges that Costco is "unlawfully trading" on its brand reputation and goodwill, misleading customers into believing that these lookalike items are officially affiliated with Lululemon.
The complaint outlines design similarities and claims that Kirkland Apparel copies protected trade dress and design patents, resulting in consumer confusion and damage to Lululemon’s brand equity.
Lululemon Seeks Court Order and Damages
The lawsuit does not specify the exact amount in monetary damages, but Lululemon is asking the court to prohibit Costco from continuing to sell the allegedly infringing products.
The company emphasized its zero-tolerance stance on intellectual property violations and pointed to its previous legal action against companies like Peloton for similar issues.
In a public statement, Lululemon reiterated its commitment to protecting the uniqueness of its brand and designs, which have helped position it as a leader in the booming athleisure market.
Kirkland Brand in the Spotlight
Costco’s Kirkland Signature label has long been known for offering affordable alternatives to high-end consumer goods, from wine and supplements to kitchenware and clothing. The brand enjoys strong consumer loyalty and is a key revenue driver for Costco.
However, this lawsuit places Kirkland's design and sourcing practices under scrutiny. Lululemon contends that the similarities between the Kirkland and Lululemon items are not coincidental, and that Costco’s marketing tactics are deliberately misleading, capitalizing on Lululemon’s market reputation to boost sales.
As of the latest reports, Costco has not issued a public statement regarding the lawsuit.
Brand Confusion and Market Implications
At the heart of the case is the issue of consumer confusion. Lululemon argues that shoppers could mistakenly assume that Kirkland-branded products are genuine Lululemon merchandise or Lululemon-approved collaborations, an association that, if untrue, could dilute the premium value of Lululemon’s brand.
Legal experts note that trade dress infringement cases hinge on whether the average consumer is likely to be misled. If Lululemon can successfully demonstrate such confusion, Costco may face restrictions on future product designs, in addition to financial penalties.
Lululemon's Broader Challenges
The lawsuit comes at a time when Lululemon is already navigating a series of financial and competitive headwinds. The company has reported a decline in foot traffic to physical stores, ongoing impacts from tariffs, and mounting pressure from athleisure competitors, including Nike, Adidas, and fast-fashion brands offering similar styles at lower prices.
In this context, protecting its designs and brand identity is more critical than ever. Analysts suggest that legal enforcement may be part of Lululemon’s broader strategy to differentiate its premium image in a saturated market.
What Comes Next?
The court’s response and Costco’s official defense will be closely watched by legal experts, investors, and industry players. If the case proceeds to trial, it could set a precedent for how private-label brands are held accountable when mimicking premium designer products.
For now, Lululemon maintains that its designs are unique, protected, and essential to its identity as a luxury athleisure brand. The company’s legal team is urging the court to act quickly to prevent further brand erosion and to reaffirm protections for trade dress and design IP in the retail landscape.
