lululemon sues Costco for trade dress and design patent infringement

On Friday, June 27^th, 2025, lululemon sued Costco in the U.S. District Court for the Central District of California. 

And, no, that’s not a typo.  lululemon does not capitalize the first letter of its name.  Weird.

Apparently, lulu has got its yoga pants in a knot on account of several apparel items carried by Costco, including articles from Jockey, Danskin, Spyder, Kirkland, and Hi-Tec.

In addition to the trade dress and design patent claims, lulu also alleges:

• Trademark infringement (Federal Law)

  
  

• False Designation of Origin, Passing Off, & Unfair Competition (Federal Law)

  
  

• Trade Dress and Trademark Infringement (California Law)

  
  

• Unfair Competition (California Law)

  
  

lulu’s registered trade dress claims -- and its design patent claims -- also sound in federal law.

Lots going on here.  

This post will focus on the design patent and registered trade dress claims.  I’ll explain why in a subsequent post. 

Before diving in, I will mention a couple of bone-headed moves:

• Danskin thought it was a good idea to use the same color name for its (arguably) knock-off product – TEALWATER BLUE. 

  
  

  • lulu asserts trademark rights in this name, but it doesn’t have a federal registration. 

    
    

  • A bush league move on Danskin’s part.  I have to imagine that only draws more of lulu’s scorn.

    
    

• Hi-Tec had an even worse idea: name its sweatshirt SCUBA, which lulu has had as a registered trademark for “clothing, namely, hooded sweatshirts, jackets, coats, tops” since 2013. 

  
  

  • Yikes!

    
    

These types of slip-ups are just dumb moves that only further stack the cards against you. 

This would have been easy to prevent with some decent internal processes.

Here’s a table laying out lulu’s trade dress and design patent assets and the corresponding accused product.

lululemon Clothing Articles	Alleged Infringing Costco Products
DEFINE® Jackets ·       Protected by Registered DEFINE Trade Dress (US Reg No. 7,526,264 and 7,526,265)	Jockey Ladies Yoga Jacket*Spyder Women's Yoga Jacket
SCUBA® Hoodies ·       Protected by U.S. Design Patent D989,442	Danskin Ladies Half-Zip Hoodie
SCUBA® Sweatshirts ·       Protected by U.S. Design Patent D1,035,219	Danskin Half-Zip Pullover*

Here’s the other IP assets lulu is asserting, together with the corresponding accused products. 

I hope to take a deeper dive on these claims in a later post.

lululemon Clothing Articles	Alleged Infringing Costco Products
ABC Pants ·       Protected by ABC Trade Dress	Kirkland 5 Pocket Performance Pant*
TIDEWATER TEALTM Mark ·       Used on SCUBA® products	Danskin products in "Tidewater Teal" color*
SCUBA® Mark ·       Trademark Registration No. 4,333,759	Hi-Tec Men's Scuba Full Zip*

* links seem to be unavailable.  Maybe Costco took them down already?

Careful readers will notice that only one of the accused products is a Costco product, the Kirkland 5 Pocket Performance Pant.  Kirkland is one of Costco’s “house brands”.  

We also know that lulu only sued Costco – at least in this case. (Meaning Jockey, Danskin, Spyder, and Hi-Tec are not named in this lawsuit).

Why not Jockey, Spyder, Danskin or Hi-Tec?  Not sure. 

But, having worked for a Costco supplier, I can tell you that they have very aggressive indemnity provisions in their supplier agreements.  This is public knowledge.

Costco’s Basic Supplier Agreement includes an indemnity requirement for all claims relating to any:

“actual or alleged infringement or misappropriation of any patent, trademark, trade name, trade dress, copyright or other right relating to any Product.”

So, if Costco loses or is exposed to any liability whatsoever (including defense costs), Jockey, et al. will be on the hook for all of it.

These other entities could be missing from this lawsuit because Costco has a license deal and is actually making these Jockey, Spyder, Danskin and Hi-Tec products.  Not sure on that either, but its possible. 

Let’s take a minute to look at what lulu will have to prove to win on its design patent and registered trade dress claims.

Design Patent Infringement

The test will compare the accused design of Danskin directly to lulu’s patented design as depicted in the drawings in lulu’s patents, not to lulu's commercial products.

Patented Design = Patent Drawings

The scope of a design patent is defined solely by its drawings (or photographs) in the patent grant. These illustrations constitute the "claim" of the patent.

Okay, so how do we compare the drawings in lulu’s patents to the accused Danskin products, to ascertain infringement?

We apply a big, sloppy subjective mess.  It’s called the “Ordinary Observer Test”.

Specifically, infringement is determined by whether an "ordinary observer" would find the accused design “substantially the same” as the patented design shown in the patent documents.

You’d be spot-on to wonder “what the heck does that mean”?

The test has also been stated as "If, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same... the patented design is infringed."

A little better. But, still murky.

For our purposes here, let’s latch onto this key take-away: 

The comparison target for the accused product is lulu’s patented design (as illustrated), not lulu’s “commercial embodiment.”

(That is, we’re not making a comparison to lulu’s actual sweatshirt or hoodie).

There’s certainly more to it than that . . . including the role of “prior art”. 

“Prior Art” is any publicly available evidence (such as documents, products, or descriptions) that shows that the patented design was already known before lulu’s patent application was filed. 

Prior art can be (and will be) used to determine if the patented design is truly new and non-obvious. 

Here, if the prior art shows lulu’s design is not truly new and non-obvious, lulu’s patent will be invalidated. 

In terms of its defense strategy, this will be a key arrow in Costco’s quiver. 

All of this speaks to whether or not lulu’s patent is even valid (although it is presumed to be so).

Prior art also plays a role in the infringement analysis. 

Specifically, in the design patent infringement analysis here, any prior art — specifically "comparison prior art" —  will used to provide context for the so-called “ordinary observer” when comparing lulu’s claimed (patented) design to the accused designs of Danskin. 

Comparison prior art helps determine whether the accused design (here, the Danskin hoodie and sweatshirt) is substantially similar to the patented design by showing what features are already known.  But, only prior art applied to the same article of manufacture as the claimed (patented) design (here, sweatshirts) is considered relevant in this analysis.

If the lulu’s patented design is “close” to prior art, small differences between Danskin’s designs, and lulu’s (patented) designs become more significant, which makes infringement less likely. 

However, if lulu’s patented design departs from prior art and Danskin’s design copies those unique features, infringement is more likely. 

In other words, prior art shapes the infringement analysis by framing the perspective of the “ordinary observer”, so as to highlight the significance of similarities and differences between the designs at issue.

For businesses, another key take-away is to make sure your design patent applications -- and their drawings -- precisely capture the “novel, ornamental design” to ensure enforceable rights. 

• “Novel” = new and unique. 

• “Ornamental” = aesthetic and non-functional. 

If your design is not new and unique, or if it is functional in nature, you won’t be able to assert it because it will be invalidated. 

Trade Dress Infringement

Let’s turn to the trade dress claims. 

For trade dress infringement, the proper test compares the accused product (here, the Jockey and Spyder jackets) to the commercial embodiment of the registered design in the marketplace – that is, lulu’s actual DEFINE jackets. 

The drawings in a trade dress registration still play a role. 

The drawings define the specific elements of the trade dress that are claimed and protected, showing what aspects of the product design or packaging are part of the “mark” and which are not (often indicated by solid lines for claimed elements and broken lines for unclaimed or functional parts in the registered trade dress drawings).

These drawings help establish the scope of protection by clearly depicting the trade dress. 

Once the “what is protected” is established, we turn to the comparison of the accused product and assess “likelihood of consumer confusion about the source of the goods.”

Huh?

Here’s where it gets interesting. 

This is the key distinction between trade dress and design patents.

We just discussed design patents.  But, to briefly review, the infringement analysis compares the accused product to the patent drawings. 

The analysis (or, “test”) is whether an "ordinary observer" would find the designs "substantially the same" based on the patent illustrations.

That’s it.

Trade dress, on the other hand, is exclusively focused on the design being associated with a source of goods. 

To be registerable in the first place, a trade dress design must be so distinctive that consumers associate the unique design with the source of the goods on which the design is used. 

The contoured silhouette of a Coca-Cola bottle is most cited example. 

That design is so distinctive and remarkable that “everyone” knows the soda they see in the contoured bottle is from the Coca-Cola company.

For purposes of infringement analysis, a successful trade dress claim must prove that consumers are “likely to be confused about the source of the goods” when encountering the products in the marketplace.

For our purposes here, lulu will have to show that the designs of the Jockey Ladies Yoga Jacket and the Spyder Women's Yoga Jacket are so similar to the lulu DEFINE jacket that consumers are likely (or, better still, actually are) confused as to the source of the jackets. 

Better stated – consumers are likely to be confused (or actually are confused) on account of the similarities in the designs that they think the Jockey and Spyder jackets are actually lululemon jackets.   

In proving all this, the analysis considers “the commercial context”, including:

• How the products appear on shelves or in advertisements; and

  
  

• The overall “commercial impression”, including packaging, labeling, and real-world usage.

It is important to note that any functional elements are excluded.  Only non-functional aesthetic choices in the commercial product are part of the comparison.

Here’s a few more details in terms of what courts look at:

Similarity of designs	What is the overall visual impression in the context of the marketplace?
Similarity of goods	This can and often does consider “product categories” and target consumers.
Consumer sophistication	How much care, if any, is taken by buyers in purchasing decisions?
Marketing channels	Do the two products overlap in sales venues and advertising?
Evidence of actual confusion	Does the company asserting its trade dress design have actual, documented instances of consumer misunderstanding?

The legal papers in this case will spend dozens of pages and have massive exhibits and addenda going through all of the above, ad nauseum.  But let’s take a brief look at these factors:

Note this part of the analysis isn’t taking a deep dive in the actual side-by-side compare-and-contrast exercise.  We’ll do that below.

• Similarity of designs and visual impression in the context of the marketplace: I think this one tilts to Costco. 

  
  

  • In the marketplace, does the overall visual impression lead a consumer to think these Jockey and Spyder jackets are actually lulu jackets?  I’m not so sure. 

    
    

  • I think just about everyone who shops for this type of athleisure apparel knows that lulu sells damn-near exclusively on a direct-to-consumer basis through its own stores and on its website.  lulu’s distribution to other retailers is very, very limited. 

    
    

  • The relevant consuming public knows they’re never going to encounter a lulu item at Costco.

• Similarity of goods.  I think this tilts towards lulu.

  
  

  • Are the “product categories” the same?  I think so.

    
    

  • Are the target consumers the same?  I think so. 

    
    

    • Although lulu could make a good argument that Costco shoppers are not always exactly like lulu shoppers. Might want to tread lightly there, though.

• Consumer sophistication.  lulu here too. 

  
  

  • Consumers that are shopping (or want to buy) a $120 jacket are pretty well researched and pretty darn careful. 

• Marketing channels.  This probably tilts slightly to Costco, because the marketing channels differ.

  
  

  • lulu mostly markets directly to its customers. 

    
    

  • So too does Costco with its mailers, emails and Connections magazine. 

    
    

  • I can’t ever remember seeing lulu ads served up in the same places where I see ads for Costco clothes.

    
    

  • Same thing with sales venues – they’re totally distinct.

• Evidence of actual confusion.  This will need to be proven (or not) with customer surveys. 

  
  

• Interestingly, lulu’s lawyers did a good job at citing to a couple of scathing articles that absolutely attacked this part of the analysis:

  
  

  • “Is That Hoodie a Lululemon or a Costco Dupe? No One Has to Know But You.” The Washington Post. (Behind paywall).

  
  

  • “Are These $20 Costco Pants a Lululemon Dupe? We Investigated.” New York Times.  (Also behind paywall).

  
  

This NYT article stated “[w]hen I held these two pairs of pants and inspected their construction, they looked almost identical. I asked Lululemon whether the brand made these pants for Kirkland.” 

Ouch!

Let’s take a look at these actual claims and products:

Design Patent Claims. Comparison of the drawings in lulu’s design patents for its SCUBA sweatshirt and hoodie to Danskin’s sweatshirt and hoodie.

lululemon SCUBA Hoodie; Design Patent D1,035,219	Danskin Half-Zip Sweatshirt

Lululemon SCUBA Hoodie Design Patent D989,442	Danskin Half-Zip Hoodie

Interestingly, the complaint provided these pictures, below.  While scintillating, it’s not the focus of the analysis.  Probably a clever call to use products of the same/very similar color, though.

I think lulu has a decent case here, if not a strong one.  While there are differences, the overall impression is quite similar. 

I think this is where “comparison prior art” will come into play.  If Costco can come up with good “comparison prior art”, lulu’s case may get significantly more difficult.

Trade Dress.

Here is where we get to take a look at both actual products, side-by-side.

Here again, I think lulu makes a good case.  I’d sue over this, particularly the Spyder jacket.

Ultimately, this case will likely settle. 

Although, it will probably only settle if:

1. Costco -- or its suppliers -- take and pay for a license (unlikely, since lulu probably won’t be excited to give one and a royalty would gobble Costco’s razor thin margins);

   
   

   or

   
   

2. Costco agrees to stop carrying (or making) these products.

Who knows – maybe we’ll get to see this one tried in court!  It will be interesting to follow along.

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