Lululemon vs. Costco Lawsuit: Dupes, Counterclaims, and Status

The Lululemon Costco lawsuit is a June 2025 federal case in which Lululemon Athletica accused Costco Wholesale of selling cheap knockoffs, or “dupes,” of three of its signature products: the Define jacket, the Scuba hoodie, and the ABC pants. Filed in the U.S. District Court for the Central District of California, the complaint runs 49 pages and pleads trademark infringement, trade dress infringement, design patent infringement, and unfair competition under federal and California law.¹² By mid-2026, the parties had settled most of the claims. One product, a men’s zip-up jacket, is still in dispute.³

What Costco Was Accused of Selling

Lululemon pointed to five items on Costco shelves: the Jockey Ladies Yoga Jacket, the Spyder Women’s Yoga Jacket, the Danskin Half-Zip Pullover, the Hi-Tec Men’s Scuba Full Zip, and the Kirkland Signature 5-Pocket Performance Pant.²⁴⁵

The accused products span several third-party labels Costco stocks alongside its Kirkland Signature line, and that mix of suppliers ended up shaping how the case was litigated and settled.

The Legal Theories Lululemon Used

The complaint stacks different kinds of intellectual property rights on top of one another, because U.S. law makes protecting garment designs difficult through any single route.

For the Define jacket, Lululemon holds two federal trade dress registrations covering mirror-image curvilinear lines running from chest to waist and chest to neck on the front, with similar lines on the back. Registered trade dress carries a presumption of validity in court.⁶

For the Scuba hoodie and ABC pants, Lululemon has no such registrations and relies on common law trade dress. The claimed Scuba hoodie trade dress covers the shape of the oversized kangaroo pocket, curved seam lines on the front, and a specific textured panel layout. The claimed ABC pants trade dress covers a semi-matte four-way stretch fabric, a distinctive crotch gusset outline, an ornamental line across the rear, and curved pocket lines with metallic circles.⁶

Lululemon also asserted two design patents covering the ornamental appearance of the Scuba hoodie, U.S. Design Patent D1,035,219 and U.S. Design Patent D989,442. Design patent infringement turns on visual similarity to the patented design rather than proof of consumer confusion.⁷ The company holds a registered trademark for the word “Scuba” on sweatshirts and jackets, and it filed a separate trademark application on June 26, 2025, for “Tidewater Teal,” one of its signature color names.⁶

To connect the products to consumer confusion, the complaint used side-by-side images and leaned on Costco’s well-known practice of sometimes sourcing Kirkland Signature goods from the same manufacturers as national brands, arguing shoppers might reasonably assume the lookalikes come from Lululemon itself.² It also cited the viral “#LululemonDupes” hashtag and coverage in outlets like the New York Times and Washington Post as evidence its designs are widely recognized. According to analyses of the filings, the complaint does not appear to include consumer survey data or documented instances of actual purchaser confusion.⁸

Why the Case Was Hard for Lululemon to Win

Trade dress protects the overall visual appearance of a product only when that appearance identifies the source and is not functional. Functionality is an absolute defense: a design element that exists because it helps the product perform cannot be protected as trade dress, no matter how distinctive it looks.⁹

Several features Lululemon claims are source-identifying — seam placement that contours the body, a crotch gusset that adds range of motion, four-way stretch fabric — can just as easily be described as standard athletic-wear engineering. Costco was widely expected to press that argument.¹⁰

For the unregistered claims on the Scuba hoodie and ABC pants, Lululemon also had to prove “secondary meaning”: that consumers link those specific design features to Lululemon as a brand rather than to a type of product. In Wal-Mart v. Samara Brothers, the U.S. Supreme Court held that product design trade dress is never inherently distinctive and always requires proof of secondary meaning.⁹ Some commentators have noted that the “#LululemonDupes” hashtag may cut against Lululemon, because shoppers searching for “dupes” know by definition they are not buying the real thing.⁸

The Tidewater Teal trademark application hit its own wall. In November 2025, the USPTO issued a nonfinal office action refusing registration on two grounds: likelihood of confusion with existing “Tidewater” registrations for footwear and jewelry, and a finding that the phrase does not function as a trademark because consumers read it as a color name rather than a source identifier. Lululemon was required to disclaim “Teal” as merely descriptive.¹¹

Fashion law scholar Susan Scafidi, who directs Fordham Law School’s Fashion Law Institute, told reporters that Lululemon has been “on the forefront of trying to find ways to protect their intellectual property,” but that U.S. law makes garment designs far harder to protect than logos. “Protecting trademarks, logos and labels is one thing. Protecting the design of a garment is another,” she said, contrasting U.S. law with European regimes where unregistered design rights arise automatically.¹²

Jacques Moret Joins the Case and Counterattacks

In September 2025, Jacques Moret Inc., the manufacturer behind several of the accused products, was allowed to intervene as a co-defendant. Jacques Moret, part of the Moret Group, produces outerwear sold under the Danskin and Jockey labels named in the complaint.¹³¹

Jacques Moret went on the offense, filing counterclaims that challenged the validity of Lululemon’s two Scuba hoodie design patents.¹⁴ That turned the litigation into a two-front fight: Lululemon was pressing infringement while defending the patents that some of its claims depended on.

Where the Lawsuit Stands Now

The case did not resolve as a single verdict or settlement. It has come apart in pieces.

On February 27, 2026, Lululemon, Costco, and Jacques Moret filed a joint stipulation resolving infringement claims tied to specific Danskin and Jockey outerwear, including items compared to the Scuba hoodie and Define jacket. The same deal ended Jacques Moret’s patent invalidation counterclaims.¹³

Further settlements in April 2026 cleared the claims involving the Kirkland-branded pants and additional outerwear, and a separate agreement with Costco’s supplier for the Spyder women’s yoga jacket wrapped up that piece of the case.³

As of May 2026, one claim remained active: infringement allegations over a men’s zip-up jacket. The case is assigned to Judge Fernando L. Aenlle-Rocha, and both sides have demanded a jury trial. Terms of the various settlements have not been publicly disclosed.³¹

Where This Case Fits

The Costco suit is part of a wider push by premium brands against retailers selling budget lookalikes. Weeks before Lululemon filed, Deckers Outdoor, owner of UGG, sued Costco in the same court over the Kirkland Signature Unisex Shearling Slipper, alleging it copied the UGG Tasman trade dress.¹⁵

Lululemon has been down this road before. In 2021 it sued Peloton Interactive over design patent and trade dress infringement in athletic apparel. That case ended in 2022 with a settlement in which Peloton, without admitting wrongdoing, agreed to phase out the designs Lululemon had identified.¹⁶ How the remaining Costco claim is resolved may shape how far U.S. trade dress law reaches into the dupe economy.¹⁷

1
CourtListener. Lululemon Athletica Canada Inc. v. Costco Wholesale Corporation
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NBC News. Lululemon Sues Costco Selling Alleged Dupes
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Bloomberg Law. Lululemon, Costco Settle Dupes Lawsuit Except for One Jacket
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ABC7 New York. Lululemon Accuses Costco Lawsuit Selling Unauthorized Versions
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The New York Times Wirecutter. Costco Pants Lululemon ABC Dupes
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Eric Goldman Blog. Analyzing the Lululemon v. Costco Dupe Suit
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Nolan Heimann. Lululemon Sues Costco Fashion Lawsuit
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Suffolk University Journal of High Technology Law. Dupes on Trial: Trade Dress in Lululemon’s Lawsuit Against Costco
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Justia. Trade Dress
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The Fashion Law. Trade Dress Law
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USPTO. Office Action, Application Serial No. 99254342
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Fordham Law News. Prof. Susan Scafidi on Lululemon Costco Dupes Lawsuit
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Bloomberg Law. Lululemon, Costco Partly Settle IP Lawsuit Over Dupe Jackets
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Legal Frame Wire. Lululemon Costco Lawsuit
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Bloomberg Law. Maker of Uggs Hits Costco, CVS With Slipper Trade Dress Suits
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Reuters. Peloton, Lululemon Settle Lawsuit Over Apparel Line
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Bloomberg Law. Lululemon’s Dupes Suit Signals Brands Must Shape Narrative