Lululemon alleges that Costco is peddling imitations of their top-selling athletic clothing.
Lululemon Athletica Inc., a leading innovator in the premium athletic apparel market, has taken legal action against wholesale retailer Costco Wholesale Corporation, accusing the latter of selling unauthorized and unlicensed versions of Lululemon's popular athletic apparel.
The lawsuit, filed on June 27, 2025, in the U.S. District Court for the Central District of California, claims that Costco has knowingly imported, marketed, and sold products that are "confusingly similar" to Lululemon’s designs, thereby infringing on Lululemon’s trade dress rights and causing consumer confusion regarding the authenticity of the products.
The lawsuit points to products sold by Costco under brands such as Danskin, Jockey, Spyder, Hi-Tec, and its in-house Kirkland label. These include items like the Danskin Half-Zip Pullover, Spyder Women’s Yoga Jacket, and Kirkland 5 Pocket Performance Pant, which Costco sells at significantly lower prices compared to Lululemon’s typical retail prices.
Lululemon argues that Costco's actions not only cause confusion among consumers—some of whom may mistakenly believe the cheaper products are authentic Lululemon items—but also harm Lululemon’s brand and market position by diluting the unique "innovative, unique and high-performing" nature of its apparel. The company is seeking damages for lost profits and a court order to stop Costco from manufacturing and distributing the alleged infringing products.
The ongoing tension between premium athletic apparel brands and discount retailers selling lower-cost alternatives that closely mimic premium designs is highlighted by this lawsuit. If successful, Lululemon’s suit could lead to stricter scrutiny on the sale of "dupes" or look-alike products in the marketplace, potentially increasing legal risk for retailers like Costco.
Lululemon takes the responsibility of protecting and enforcing its intellectual property rights very seriously and pursues the appropriate legal action when necessary. The company is an innovation-led company that invests significantly in the research, development, and design of its products.
At the time of writing, Costco has not responded to a request for comment regarding the lawsuit. The lawsuit does not specify the amount of monetary damages Lululemon is seeking.
This is not the first time Lululemon has taken legal action against a company over apparel disputes. In 2021, Lululemon sued Peloton over an apparel dispute, although no further details about the nature of the dispute were disclosed.
The lawsuit underscores the importance of intellectual property enforcement in the athleisure market, where brand differentiation and design innovation are key competitive advantages. The outcome of this legal battle could set a precedent for how aggressively brands protect their design and trade dress rights against wholesale and discount retailers.
- The ongoing dispute between Lululemon and Costco is centered around business matters, specifically the production and sale of products that are deemed to infringe on Lululemon's trade dress rights in the finance sector, potentially causing confusion among consumers.
- Lululemon, a company that emphasizes innovation and design excellence in finance and business, is seeking damages for lost profits and a court order to stop Costco from manufacturing and distributing the allegedly infringing products, highlighting the importance of intellectual property enforcement in the athleisure market.