The war between brand and bargain clothing just got a lot more intense. On June 27, 2025, Lululemon filed a federal lawsuit accusing Costco of selling “confusingly similar” knockoffs of its best-selling clothes—including its Scuba hoodies, Define jackets, and ABC pants. But instead of getting public support, Lululemon is facing an uphill battle in the court of public opinion.
What is the Lawsuit About?
Lululemon claims that Costco is infringing on its trademark and trade dress rights by selling lower-cost copies that are “difficult to distinguish” from authentic Lululemon apparel. The lawsuit names several private-label brands sold at Costco—Danskin, Jockey, Spyder, Hi-Tec, and even Kirkland—as offering lookalikes of Lululemon’s original products.
The company says Costco has “traded on Lululemon’s reputation” and that some buyers either mistake the products for the real thing or intentionally buy them to get the look without the price tag.
Lululemon is asking the court to:
- Stop Costco from selling the alleged knockoffs
- Remove ads and marketing for the items
- Award Lululemon damages for lost profits
What is Trade Dress?
Trade dress is a subset of trademark law that protects the visual appearance of a product and/or its packaging to the extent they serve as an indicator to customers that the product and/or packaging comes from a particular company. Whereas trademarks typically cover words, logos, and symbols, trade dress usually covers the overall look and feel of a product or its packaging. Trade dress often encompasses things like shape, color, texture, and overall design.
To successfully sue a competitor for infringing your trade dress, your trade dress must be distinctive, nonfunctional, and confusingly similar. Distinctiveness means that your trade dress is either inherently distinctive (immediately identifying the source of a product) or has acquired secondary meaning (consumers have begun to associate the design with a specific source over time). Nonfunctionality means the features claimed as trade dress must not be essential to the use or purpose of the product or affect its cost or quality. If the design is functional, it cannot be protected under trade dress law. Protection of functionality is what patents are for. Finally, the trade dress must be such that copying it would likely confuse consumers about the source or origin of the goods or services.
What is Being Copied?
Lululemon points to multiple examples, such as:
- Its $118 Scuba hoodie vs. the $20 Danskin half-zip pullover
- The $128 Define jacket vs. the $22 Spyder yoga jacket
- The $128 ABC pants vs. Kirkland’s $10 performance pants
It also has several other claims, such as the claim that Costco infringed its common law (unregistered) trademark “Tidewater Teal,” for a popular shade of Lululemon clothing.
The Rise of the “Dupe” Culture
This lawsuit is part of a bigger trend: “dupe” shopping. From Target’s version of Hermès slippers to Walmart’s “Wirkin” bag (a Birkin knockoff), brands are under pressure from retailers offering similar looks at slashed prices.
The difference now? Social media has made consumers much savvier. Hashtags like #luludupe and #dupefind are racking up millions of views on TikTok and Instagram, giving cheap lookalikes viral appeal.
Are Shoppers Really Confused?
That is where Lululemon’s case starts to unravel.
While the company argues that Costco’s lookalikes are designed to trick consumers, thousands of shoppers say otherwise. Comments across social media platforms echo the same sentiment: that customers are not confused, they just do not want to pay and arm and a leg for leggings.
This is not the first time Lululemon has fought copycat claims. In 2021, it went after Peloton over apparel, only to settle later with a partnership. It also fought back with marketing campaigns like 2023’s “dupe swap,” where customers traded knockoffs for the real deal.
A Battle of Experts, or Not
While there are many similarities between the Lululemon clothing and the accused clothing, it may be difficult to argue that these similarities are not only nonfunctional, but also likely to cause confusion among the public, that the accused products are actual Lululemon products. In my experience, cases like this come down to: 1) what the experts for each side have to say; and 2) if the jury believes them.
Given the enormous cost to both sides of litigating this case all the way to a jury verdict, and the fact that Lululemon may prefer an injunction over money, there is a strong chance both sides will settle this case long before it reaches a jury.
Winning the Battle, but Losing the War
Lululemon says it is protecting its brand and innovation. But to some consumers, this lawsuit looks like sour grapes. Amid rising prices and economic strain, shoppers are looking for value, and they see Costco delivering it.
Some critics also complain that Lululemon’s quality has declined while prices have soared. Others point to past controversies involving the companies themselves, pointing out that compared to Lululemon, Costco is seen by many as a more consumer and employee-friendly company.
Lululemon is betting big on protecting its intellectual property, but it may have underestimated the power of public sentiment. Even if the company wins in court, it is unclear whether it will win where it matters most—with its customers.
Protecting Yourself
When the majority of your company’s value rests in its trademarks and trade dress, it is important to register as many key trademarks and trade dress as possible. It is also important to register at the federal level to garner the benefits of nationwide notice and larger damages. Another benefit is that federal registration alone is sometimes enough by itself to convince an infringer to surrender without a fight.
Conversely, if a competitor sees that your trademarks and trade dress are not registered, they may decide to fight even if they are unsure about the outcome. They may decide that if you are not willing to spend a few thousand dollars registering your trademarks and trade dress, you are even less likely to spend hundreds of thousands of dollars trying to defend your unregistered common law marks.
If you do not want a competitor using your company’s trademarks and/or trade dress, the small cost of registration will not only be more likely to convince infringers to come to the settlement table, but the ® symbol, that you are only allowed to use on registered trademarks, is often enough by itself to convince competitors not to infringe your trademarks in the first place. In the age of hyper-social media, avoiding litigation and all of its potential consumer backlash, is almost always a win. The bottom line is that if your company is worth fighting for, your trademarks and trade dress are worth registering.
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