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Lululemon, the premium athletic and lifestyle brand, has accused Costco of copying its patented clothing designs in a federal lawsuit.
The apparel maker alleges that Costco made "dupes" of at least six of its designs, including its Scuba hoodie, Define zip-up jacket and men's ABC pant, according to the lawsuit, filed June 25 in U.S. District Court for the Central District of California.
"As an innovation-led company that invests significantly in the research, development, and design of our products, we take the responsibility of protecting and enforcing our intellectual property rights very seriously and pursue the appropriate legal action when necessary," a Lululemon spokesperson said in a statement.
Costco did not respond to a request for comment.
Costco has long been known for its private-label Kirkland Signature line and for producing its own versions of an array of consumer products and staples including liquor, vitamins, butter and diapers. But in recent years, Costco's versions of pricey athleisure have gone viral, raising the retailer's profile among budget-conscious but style-minded consumers. Kirkland Signature buyers routinely turn to TikTok and other social media outposts to point out products' striking similarities to brands such as Vuori, Ugg and Aritzia.
Lululemon, best known for its buttery-soft leggings and viral belt bags, operates 770 stores worldwide. It reported $10.6 billion in net revenue last year, a 10 percent increase year over year. But its growth has been driven largely by international customers, as stiffer domestic competition and a more discerning customer lead to weaker growth in the United States, analysts said.
In its 49-page lawsuit, Lululemon alleges Costco sold items made with patent-protected designs for about a half-dozen pieces of apparel under the labels Danskin, Jockey, Spyder and Kirkland Signature. The Costco products are a fraction of the price: The Danskin women's half-zip hoodie retails for less than $20, compared with $118 for Lululemon's Scuba half-zip hoodie. (The lawsuit cites a Jan. 25 article published in The Washington Post regarding Costco's dupes.)
Because many Kirkland-labeled products are produced by name-brand companies, some consumers may assume that Lululemon is the maker of the look-alike products, the apparel company contends, but the warehouse club does nothing to dispel those perceptions. By omission, the Issaquah, Washington-based chain is "likely to continue to cause confusion, mistake, and deception among consumers" as to the source or affiliation of its products, the lawsuit alleges.
Lululemon, which is based about 150 miles north in Vancouver, British Columbia, wants Costco to stop selling, importing, distributing, advertising and marketing the products.
Other brands have also filed lawsuits over product dupes. Deckers, which owns Ugg, filed a federal lawsuit against Costco in May over its Kirkland Signature unisex shearling slipper, which resembles the Ugg Tasman. Last year, American Eagle sued Amazon, alleging the online retailer sold dupes of its Aerie sweatshirts and workout shorts, labeling the product with a brand name spelled slightly differently. (Amazon founder Jeff Bezos owns The Washington Post.) Tapestry, the parent company of handbag brand Coach, sued Shein in March for allegedly designing, manufacturing and selling dupes with the brand's signature "C" logo.
Costco, which has about 900 locations worldwide, reported $249.6 billion in sales during its last fiscal year, which ended in September. That is a 5 percent increase year over year. The wholesale chain has continued to dominate in the grocery space as consumers look for value in their household staples.