Lululemon has accused Costco of selling unlicensed knockoffs of popular products like the Scuba pullovers and ABC Pants.
Key Facts
In a lawsuit filed in California, Lululemon accused Costco of selling and, in one case, manufacturing knockoffs of its Scuba sweatshirts, Define jackets and ABC pants.
The complaint alleged trade dress infringement, unfair competition under the Lanham Act, patent infringement and violation of the California Unfair Business Practices Act, and asks that Lululemon be compensated for the lost profits and «significant harm» done to its brands and reputation.
Costco, which did not respond to request for comment from Forbes on Tuesday, could be forced to pay up if Lululemon prevails, but winning a trademark infringement lawsuit over dupe products is a tall order.
Dozens of successful brands have sued over the increasing production of dupes in the last several years, but proving a product was copied isn’t enough to win—the original producer must also show that the copycat product could actually “dupe” customers into believing the knockoffs are the real thing.
The onus of proving the copycat product actually confused customers and impacted the original manufacturer’s business falls on the originating company, New York trademark lawyer Karl Zielaznick told Forbes, and it’s very hard to prove: “Customers often know that they aren’t buying a $5,000 watch for $100… They know it’s a different, dupe product,” he said.
