On June 20, 2019, upscale Canadian yoga-inspired apparel company, Lululemon Athletica, filed a lawsuit in the United States District Court for the Northern District of California alleging federal trademark infringement, federal trademark counterfeiting, and both federal and state unfair completion claims against discount retailer Ross Stores, Inc. and its athletic apparel supplier, Impulse Off Price Apparel (“IOPA”), for importing and selling cheap counterfeit copies of Lululemon’s high-end leggings.
As known by many fans and consumers, Lululemon is a leading designer and retailer of high-quality, yoga-inspired athletic apparel. The Canadian athletic apparel company founded in 1998 develops, manufactures, and sells premium apparel including shirts, shorts, pants, and leggings along with other products such as yoga mats, bags, and accessories. Per the complaint, Lululemon’s products are designed to offer performance, fit, and comfort while incorporating both function and style, which allow Lululemon to address the needs of athletes and consumers. Lululemon’s products all bear its distinctive trademarks.
The complaint provides that Lululemon owns and widely promotes several trademarks which have earned substantial fame and considerable goodwill among the public. Lululemon’s registered trademarks include registration nos. 4391115, 4367598, 2607811, 2460180, 4345516, 5393854, which include marks for “LULULEMON” and the “Upside-Down U Seam.” The complaint provides that Lululemon’s Trademarks attributed to its high level of brand recognition and that as a result of Lululemon’s longstanding and widespread use and promotion of the Lululemon trademarks, Lululemon’s customers worldwide have come to rely upon Lululemon’s trademarks to identify its high-quality goods and services.
In March 2019, Lululemon representatives bought 20 counterfeit leggings from Ross Stores, Inc. operated dd’s DISCOUNTS stores in San Leandro and Hawthorne for $7.99 each. Lululemon’s All the Right Places Plant II and Fast & Free Tight usually retail for $128 each. Per the complaint, Lululemon representatives analyzed the counterfeit leggings and determined that the counterfeit leggings were among the lowest-quality counterfeit leggings. Lululemon makes their famous All the Right Places Pant II and Fast & Free Tights using smooth, four-way stretch Full-On Luxtreme fabric and Lululemon’s Nulux quick-drying, seat-wicking fabric. Unlike the four-way stretch Full-On Luxtreme fabric and the Nulux quick-drying fabric which compose Lululemon’s products, thin inexpensive polyester blends compose the counterfeit leggings.
The complaint alleges that Ross Stores, Inc. and IOPA imported, advertised, distributed, and sold at least 1,000 counterfeit leggings to consumers and retailers, and that Ross Stores, Inc. and IOPA were aware of or willfully blind to the fact the leggings were counterfeit. Lululemon supports its allegation that Ross Stores, Inc. and IOPA were aware of or willfully blind to the fact that the leggings were counterfeit due to the difference in quality between the counterfeit and original Lululemon leggings. Lululemon claims that Ross Stores, Inc. and IOPA know that Lululemon only sells its products through its website, outlet stores, and strategic partners such as premium yoga studios, gyms, and wellness centers.
The complaint further alleges that IOPA imported counterfeit leggings bearing marks identical or substantially indistinguishable from Lululemon’s trademarks. Lululemon claims Ross Stores, Inc. and IOPA confused consumers through selling counterfeit leggings branded with identical or substantially indistinguishable trademarks from Lululemon’s trademarks. In support of its allegation, Lululemon identifies social media posts indicating consumers actually believed they purchased authentic Lululemon leggings from dd’s DISCOUNTS.
The lawsuit includes federal trademark infringement, federal trademark counterfeiting, and federal and state unfair completion claims against Ross Stores, Inc. and IOPA.
To succeed on its trademark infringement claim, Lululemon needs to demonstrate that it has valid and subsisting trademark rights in its “LULULEMON ATHLETICA” (U.S. reg. no. 2607811), Lululemon logo (U.S. reg. no. 2460180), and “LULULEMON” (U.S. reg. no. 4391115) trademarks and that the counterfeit leggings use a mark that is confusingly similar thereto. In other words, Lululemon needs to demonstrate that the use is likely to confuse a consumer regarding the source and origin of the leggings sold in the discount retailers, and is likely to cause confusion or mistake and to deceive purchasers as to Lululemon’s affiliation, connection, or association with, or approval or sponsorship of the counterfeit leggings.
To succeed on its trademark counterfeiting claim, Lululemon needs to demonstrate that Ross Stores, Inc. and IOPA intentionally used the counterfeit marks in commerce while knowing the marks were counterfeit. Lululemon also needs to demonstrate that Ross Stores, Inc. and IOPA used the counterfeit marks in connection with the sale, offering for sale, or distribution of the alleged counterfeit leggings, and that this use was like to confuse or deceive consumers regarding the source and origin of the leggings sold in the discount retailers.
To succeed on both the federal and state unfair competition claims, Lululemon must establish that it holds valid and subsisting trademark rights in its trademarks. Additionally, Lululemon must establish that the use of the marks on the counterfeit leggings is likely to cause consumer confusion with respect to the source and origin of the leggings, and with respect to Lululemon’s affiliation with the counterfeit leggings.
Lululemon seeks a court order prohibiting Ross Stores, Inc. and IOPA and their agents, servants, employees, and any related persons or entities acting in concert with them from unlawfully using and/or counterfeiting the Lululemon trademarks or any marks confusingly similar to the Lululemon trademarks. Lululemon also seeks an order requiring Ross Stores, Inc. and IOPA to destroy the remaining counterfeit leggings. Naturally, Lululemon seeks damages to the fullest extent available under the law.