Canadian athletic wear maker Lululemon filed a lawsuit against Costco Wholesale Corporation in California federal court, alleging intellectual property infringement. Lululemon claims that Costco is selling 'knockoff' sweatshirts, jackets, and pants that unlawfully copy its designs.
The lawsuit specifically targets activewear products sold under Costco's Kirkland Signature private-label brand. This legal challenge could have significant implications for Costco's private-label strategy, particularly in the apparel category, and may lead to substantial legal costs.
The allegations of design copying could also impact the reputation of the Kirkland Signature brand, which is central to Costco's value proposition. Investors will monitor the outcome of this litigation for potential financial penalties or required changes to product offerings.
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