Lululemon’s Lawsuit Against Costco — What Just Happened
On June 27, 2025, athletic apparel powerhouse Lululemon Athletica filed a major lawsuit against Costco Wholesale in the U.S. District Court for the Central District of California. The suit accuses Costco of selling “confusingly similar” replicas of Lululemon’s trademarked products—items that Lululemon claims are so alike they could deceive consumers. This legal battle centers on Costco’s Kirkland private label and other brands like Danskin and Jockey and targets alleged “dupes” of Lululemon’s signature designs: Scuba hoodies, Define jackets, and ABC pants.
The complaint includes six specific Costco products, all said to infringe upon Lululemon’s design patents, trade-dress rights, and trademark protections. Lululemon highlights shocking price differentials—e.g., its $118 Scuba hoodie vs. Costco’s roughly $8 version—as evidence of predatory copying designed to siphon off sales.
Lululemon is demanding monetary damages, an injunction to stop sales of the allegedly infringing products, removal of related advertising, and a jury trial. Costco has not yet issued an official response.
Legal and Market Stakes
Intellectual Property Allegations
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Trade-dress infringement: Lululemon says Costco replicated distinguishing features of the Scuba hoodies, Define jackets, and ABC pants—a violation of trade-dress protection.
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Design patent and trademark violations: The lawsuit lists multiple design patents tied to hoodies and pants, and fully asserts trademark misuse—especially with the use of Lululemon’s trademarked color “Tidewater Teal”.
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Dilution and consumer confusion: Lululemon warns that these near-identical items cause consumer confusion—some may buy Costco items thinking they are genuine, while others will knowingly choose “Lululemon dupes”.
Market and Investment Implications
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Current share impact: As of late June 30, Lululemon’s stock saw a modest uptick (~0.7%) in premarket trading, largely unaffected, while Costco’s remained steady.
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Cost factor: High pricing and macroeconomic pressures (e.g., tariffs, slow store traffic) have hit Lululemon hard—making protecting its brand crucial.
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For investors: Intellectual property litigation is becoming a greater risk for premium brands. Costs extend beyond finances—brand dilution and lost goodwill are also at stake.
What These Dupes Look Like (Side‑by‑Side Comparison)
| Lululemon | Costco (Kirkland et al.) | Price Comparison | Issue |
|---|---|---|---|
| Scuba Hoodie | Almost identical style, same pocket and zipper design | $118 vs. ~$8 | Illicit trade‑dress replication |
| Define Jacket | Same fit, panel design; brands include Spyder, Danskin | Mid‑range vs. low-price | Patent and trademark breach |
| ABC Pants | Nearly identical look, stitching and gusset pattern | $128 vs. ~$20 | Copying hallmark design features |
Why This Matters: A Bullet‑Point Overview
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Brand Protection: Lululemon invests heavily in product design, R&D, and brand equity. Dupes can erode that value over time .
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Consumer Clarity: When dupes are nearly identical, consumer confusion is real—those buying may wrongly assume they’re buying original Lululemon items.
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Legal Strategy: This isn’t Lululemon’s first IP lawsuit (e.g., Peloton 2021); its aggressive defense signals it's required to protect its brand.
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Investor Signal: Seeing Lululemon prevail could vindicate its premium status. Conversely, failure could damage brand reputation and sales strategy .
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Costco under Scrutiny: If found guilty, Costco could be forced to halt private-label production, remove infringing stock, and pay damages—costly and operationally complex.
Consumer Voices on the Dupes
Reddit users long ago began comparing Costco dupes favorably—even with minor quality compromises:
“Lululemon pants offer more colors, more fits…slightly better quality… but Costco pant is 1/6 of the price!”
“Same zippered pocket placement… Even the same stitch endings… Crazy similar… for 15% of the cost.”
These discussions underscore why Lululemon is alarmed—when customers explicitly compare them side-by-side, imitation begins to bite deep into future market potential.
Final Thoughts
Lululemon’s lawsuit against Costco, filed June 27, 2025, marks a pivotal moment in brand vs. bargain battles. It’s not just a legal dispute—it’s a statement that in the premium athleisure space, brand identity and design ownership could make or break long-term success.
If Lululemon wins, the ruling could curb proliferation of copycat goods across big-box retailers and specialty stores alike. It may signal a shift—brands owning their look will fight harder, and wholesale giants must be more cautious.
