Successful Dupe or Design Theft? Lululemon and Costco Face Off in Trade Dress Dispute

By: Kate L. Dargan and Moish E. Peltz, Esq.

Introduction

In the world of fashion, dupes might be “trendy” − but in the world of intellectual property, they can also be costly. One high-profile example is Lululemon Athletica Inc.’s recent lawsuit against Costco Wholesale Corporation, filed on June 27th. The global athletic apparel company is suing Costco for unlawfully trading on Lululemon’s “reputation, goodwill, and sweat equity by selling unauthorized and unlicensed apparel” and by employing “knockoff, infringing versions of its products.”[i]

According to Lululemon, the allegedly infringing products include the Danskin Ladies Half-Zip Hoodie, Kirkland Signature Five-Pocket Performance Pants, and others. For instance, Lululemon’s own Scuba Hoodie sells for $118, while Costco’s version sells for as little as $8 – a stark price difference. It is worth noting that Kirkland Signature, Costo’s main private-label brand, generates approximately $86 billion in annual sales, highlighting its broad appeal, as well as Costco’s experience in offering low-cost fashion to customers.

Lululemon argues that an “ordinary observer” would struggle to distinguish between Costco’s products and authentic Lululemon products; which is where their main concerns lie.[ii] “As an innovation-led company that invests significantly in the research, development, and design of our products, we take the responsibility of protecting and enforcing our intellectual property rights very seriously,” a Lululemon spokesperson said.[iii] In addition, this is not Lululemon’s first attempt to protect its intellectual property through litigation; in 2021, the company sued Peloton Apparel over lookalike clothing items, although the two companies eventually settled.  

Lululemon has requested a jury trial and is seeking damages for potential lost sales caused by Costco’s allegedly similar products. The company is also asking the court to issue an injunction to halt further sales of the infringing items.

Analyzing Lululemon’s Legal Claims

Lululemon’s primary claim against Costco is trade dress infringement. Specifically, the company alleges that Costco is misleading customers into believing its Kirkland Signature and Danskin branded “dupes” are authentic Lululemon products.

In general, trade dress protects the overall look and feel of a product, space, or brand that signals its source to customers. The leading trade dress case, Two Pesos, Inc., v. Taco Cabana, Inc., requires that to establish trade dress infringement, a Plaintiff (here, Lululemon) must show that the trade dress is both distinctive and non-functional; meaning, the features are primarily aesthetic or source-identifying, rather than essential to the product’s use or performance.[iv] A Plaintiff then must show that the Defendant’s use is likely to cause consumer confusion. Courts assess consumer confusion based on several “DuPont” factors, such as: (1) similarity of design, (2) relatedness of the products, (3) similarity of marketing channels, (4) buyer sophistication, (5) the Defendant’s intent, and (6) any actual evidence of confusion (e.g., emails from customers mistaking the brands). See Application of E. I. DuPont DeNemours & Co., 476 F.2d 1357, 1360 (C.C.P.A. 1973).[v] Even if the threshold requirements of non-functionality and distinctiveness are met, if there is a little to no likelihood of confusion, a trade dress infringement claim will not prevail.

Lululemon’s specific trade dress allegations include the use of synthetic, stretchy material similar to its own, as well as Costco’s offering of items in “tidewater teal” – a color Lululemon uses across several products – though that shade does not appear on Costco’s website. Lululemon also claims that its “triangle shaped” gusset in the crotch of its ABC pants has been copied.

On the left is the Costco Danskin Women’s Lightweight Tight. On the right is the Fast and Free High-Rise, 5 Pocket Thermal Tight.

However, some experts are skeptical of these claims. Alexandra Roberts, Professor of Law and Media at Northeastern University, for example, remarked that her first reaction as a trademark expert was that the trade dress looked “pretty functional.” “Those pants look really basic,” she continued.[vi]     A stronger argument from Lululemon may lie in the likelihood of confusion element. Costco is known for working with manufacturers of popular branded products for its private-label Kirkland Signature line, although this information is not clearly revealed to customers. As a result, Lululemon argues, Costco customers may mistakenly believe Kirkland Signatures products come from the same source as the original Lululemon products. But this argument also impliedly assumes that consumers know that the products are marketed by two different companies, but are potentially manufactured by the same company (if that is even correct). It is unclear whether this set of facts is in fact “consumer confusion.” As the case proceeds, the central question remains: are consumers confused? Did Costco infringe on Lululemon’s trade dress − or did it simply launch a low-cost, trend-driven alternative?

Assessing the Legal Threshold for Trade Dress Infringement Amid Rising Dupe Culture   

Today, “fashion dupes” (lower-cost alternatives to high-end clothing and accessories) are increasingly drawing businesses into legal disputes. The issue has become especially prevalent in the age of social media, where influencers routinely direct their followers to knockoffs, fueling an online dupe culture. In Lululemon’s complaint, the company noted – without naming additional sellers beyond Costco – that several companies have “replicated or copied” its apparel to offer cheaper alternatives, often promoted through viral hashtags such as #LululemonDupes on TikTok.

Similar cases to the Lululemon vs. Costco suit have emerged in recent years; however, successful trade dress infringement claims against “dupes” remain relatively rare. For example, Benefit Cosmetics recently lost a case in California against e.l.f. Cosmetics, which had released a $6 Lash-n-Roll mascara designed to mimic Benefit’s $29 Hook-n-Roll mascara. Despite similarities in packaging and product design, the court ruled that e.l.f.’s version did not infringe Benefit’s trade dress, finding that consumers were unlikely to confuse the two products.[vii] This case emphasizes that intellectual property law does not punish mere resemblance, but rather confusion and intentional deception. If Lululemon’s products are viewed by the court as similarly distinguishable from Costco’s (either visually or in terms of brand perception), then, like Benefit Cosmetics, the company may struggle to prove likelihood of confusion.

The importance of proving consumer confusion is underscored by yet another high-profile dispute that was never litigated. In 2024, Walmart was accused of selling a “dupe” version of Hermès iconic Birkin Bag, marketing a $78 version of a luxury item that retails for $9,000 up to $100,000. Despite the publicity surrounding the event, Hermès explicitly opted not to sue due to low likelihood of confusion: Executive Chairman Axel Dumas admitted the imitation by Walmart was “quite detestable,” but the quality difference was so stark that no reasonable consumer would mistake the Walmart bag for an authentic Hermès product (and thus impliedly there could be no actionably lawsuit under a likelihood of confusion theory).[viii]

Lastly, the element of intent will play a key role in the likelihood of confusion analysis. A relevant example is a case brought by Gavrieli Brands, the maker of Tieks ballet flats – recognizable by their signature blue outsoles. In 2018, Gavrieli brought a lawsuit against Soto Massini which resulted in a $2.1 million jury award for trade dress infringement. One factor that weighed heavily in Gavrieli’s favor was deliberately targeting consumers of Tieks authentic brand through a direct marketing campaign on Facebook to sell the “duped” product. Gavrieli successfully argued that this was evidence of deliberate intent to sell a look-alike product to the same consumer base, was supportive of a consumer confusion theory, and was intended to divert sales from Tieks to Soto Massini. As a result, Lululemon’s case would be strengthened if they can point to similarly targeted marketing or other signs of intentional mimicry by Costco.[ix]

This is not the first time Costco has faced allegations of profiting from brand confusion. In a high-profile case brought by Tiffany & Co., Costco was found liable for trademark infringement after selling engagement rings labeled as “Tiffany” settings (distinguishing the Tiffany brand from the category of Tiffany-style ring settings), despite Costco having no affiliation with Tiffany. The Second Circuit Court of Appeals reversed the district court finding in favor of Costco, holding that consumers would not have been confused by the rings sold at Costco.[x] Like in the Tiffany & Co. lawsuit, Costco’s liability in the Lululemon case will depend on whether there is clear evidence of consumer confusion and whether there is any supportive evidence of Costco’s intent to deceive.

How Can We Help?

Our attorneys are committed to educating individuals about their trade dress and intellectual property rights in the fashion industry and beyond, especially as these areas evolve in today’s rapidly changing legal landscape and the prevalence of “dupe” culture. If you have questions about trade dress infringement or other intellectual property matters, please contact our team at (516) 599-0888 or submit the form below.

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Kate L. Dargan is a 2025 Summer Law Clerk at Falcon Rappaport & Berkman in the Intellectual Property, Digital Assets, and Litigation & Dispute Resolution Practice Groups. She is a rising 3L at Hofstra Law, where she serves as the Managing Editor (Fact Pattern Writer) of Moot Court Board and the Page Proof & Resource Editor of Family Court Review.  

[i] Valinsky, J. (2025, July 1). Lululemon accuses Costco of selling “unauthorized” versions of its $128 pants | CNN business. CNN. https://www.cnn.com/2025/06/30/business/lululemon-costco-lawsuit      

[ii] Id.

[iii] Id.

[iv] Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 763, 112 S. Ct. 2753, 2755, 120 L. Ed. 2d 615 (1992)

[v] Application of E. I. DuPont DeNemours & Co., 476 F.2d 1357, 1360 (C.C.P.A. 1973)

[vi] Lululemon’s lawsuit against Costco highlights the rise of Fashion “dupes.” AP News. (2025a, July 2). https://apnews.com/article/costco-lululemon-birkin-fashion-dupes-tiktok-2def75bcaf37e81ccb0065fe67b82101

[vii] Benefit Cosms. LLC v. e.l.f. Cosms., Inc., No. 23-CV-00861-RS, 2024 WL 3558848, at *5 (N.D. Cal. July 25, 2024)

[viii] Hart, J. (n.d.). Hermès CEO says he was “irritated” by viral fake birkins. Business Insider. https://www.businessinsider.com/hermes-ceo-viral-wirkin-walmart-birkin-bag-copies-2025-2

[ix] Gavrieli Brands LLC v. Soto Massini (USA) Corp., No. CV 18-462 (MN), 2020 WL 1443215, at *6 (D. Del. Mar. 24, 2020)

[x] Tiffany & Co. v. Costco Wholesale Corp., 971 F.3d 74, 80 (2d Cir. 2020)

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