How Lululemon’s Lawsuit Against Costco Highlights a Crucial Brand Protection Lesson
When Lookalike Leggings Become a Legal Battlefield
If you’ve ever spotted a familiar-looking product on Costco’s shelves and wondered if it’s too close for comfort—so has Lululemon. The athletic apparel giant recently filed a lawsuit against Costco, alleging that the wholesale retailer is selling leggings that are “confusingly similar” to Lululemon’s signature styles.
Why does this matter? If you’re a business owner, brand builder, or creative entrepreneur, this case is a major wake-up call about the power—and fragility—of your intellectual property (IP). The Lululemon-Costco lawsuit is more than corporate drama; it’s a real-world example of why trademarks and trade dress matter, and how failing to protect your brand can result in lost sales, diluted reputation, and legal consequences.
In this article, we’ll unpack what’s at stake in this case—and what your business should do now to avoid similar pitfalls. You can also review our guide on how to avoid trademark disputes when launching a new product for proactive strategies.
What Is a Trade Dress—and Why Is It at the Center of This Case?
In legal terms, “trade dress” refers to the visual appearance of a product or its packaging that signifies its source. Think of Lululemon’s high-waisted leggings with sleek seams, distinct waistband shapes, and signature logos—it’s not just the name, it’s the look and feel.
Lululemon’s lawsuit claims that Costco’s leggings mimic these visual cues so closely that consumers might believe they’re buying actual Lululemon apparel, even though they’re not. That’s a key issue in trademark and trade dress law: if another business copies your product’s “dress,” you may have grounds to claim infringement—even without copying the brand name.
Trade dress protection ensures that brands can build recognition and customer trust without constant fear of imitation. But you must take proactive legal steps to register and enforce these rights—especially in today’s fast-changing digital IP environment.
The Real Risks of Product Copycats for Your Brand
Costco isn’t accused of counterfeiting, but of creating confusion. That distinction is crucial. If a competing product looks like yours, uses similar color palettes, patterns, or silhouettes, and is sold at a lower price, it can:
- Undermine your brand’s perceived value
- Confuse loyal customers or first-time buyers
- Divert sales and profits
- Damage your brand’s hard-earned reputation
For small businesses, startups, and creatives, the threat of knockoffs is especially dangerous. You may not have Lululemon’s legal war chest, but you do have the right to fight back—with the right protections in place.
Brand Protection as a Business Asset
Trademarks and trade dress aren’t just legal tools—they’re assets that increase your company’s valuation, support investor confidence, and signal professionalism. Enforcing your rights, as Lululemon is doing, shows the world that your brand is worth protecting.
Even if you’re not a publicly traded company, having registered trademarks and documented trade dress elements can:
- Attract licensing or distribution deals
- Give you leverage in partnerships
- Boost your negotiation power during a sale or acquisition
- Let you stop infringers with cease-and-desist letters or lawsuits
How Protecting Your IP Opens Doors (and Prevents Headaches)
It’s tempting to think of IP as a “legal nice-to-have,” especially in early stages of business growth. But in truth, your brand’s look, name, logo, and packaging design can open revenue streams if properly protected. Consider:
- Licensing your product design to a wholesaler or retailer
- Monetizing branded merchandise
- Collaborating with other brands without fear of losing your identity
- Preventing others from undercutting your pricing using your own brand equity
The financial upside of owning your IP—and the risk of not—should never be underestimated. This is especially true when dealing with emerging legal challenges such as AI and generative technology IP issues.
Practical Steps to Secure Your Brand Today
Whether you’re running an e-commerce store, selling physical products, or building a personal brand, here’s how to start protecting your IP today:
- Register your trademarks – Your name, logo, and even taglines are worth securing.
- Document your trade dress – Keep records of your product design, packaging, and marketing materials.
- Use brand identifiers consistently – Repetition builds recognition and strengthens your legal position.
- Monitor the market – Keep an eye out for copycats and be ready to respond.
- Consult an IP attorney – Especially if you believe your rights are being infringed or you’re ready to scale.
At The Law Spot, we help brands like yours proactively protect their identity and stay out of legal hot water.
What This Lawsuit Means for the Future of Brand Enforcement
Cases like Lululemon’s are becoming more common as brands clash with retailers over imitation products. Courts will continue to shape the boundaries of what counts as “confusingly similar,” and small businesses should take note.
The takeaway? If your business relies on your brand’s appearance or reputation, you must treat it as intellectual property from day one. Waiting until you’ve “made it” could mean it’s too late to defend what you’ve built.
Need help protecting your brand from copycats or competitors?
At The Law Spot, we specialize in helping founders, creators, and product-based businesses legally safeguard their ideas and designs.
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