Retailer Lululemon Athletica (LULU) is accusing Costco Wholesale (COST) of infringing on its intellectual property and trademarks.
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Specifically, Lululemon alleges that Costco sold knockoffs of its athletic apparel and other clothing, violating its intellectual property and brand as a result. The accusations are contained in a lawsuit filed against Costco by Lululemon Athletica in a California court.
Costco denies the allegations that it copied Lululemon’s Scuba hoodies and sweatshirts, Define jackets, and ABC pants, and sold knockoff versions of the products to consumers in the U.S. In its response to the lawsuit, Costco says it acted in good faith at all times and feels Lululemon is not entitled to any compensation.
Jury Trial
Vancouver-based Lululemon claims in its lawsuit that some of its knockoff products were sold under Costco’s private label brand called Kirkland, while others were made by outside manufacturers such as Jockey and Spyder.
Both Lululemon Athletica and Costco Wholesale have asked the court to hear the matter in a jury trial, raising the prospect of the two corporate heavyweights squaring off against each other in a courtroom. Their legal battle started in June of this year when Lululemon alleged that Costco was selling knockoffs of its products, infringing on its trademarks and hurting its reputation and brand.
Is LULU Stock a Buy?
The stock of Lululemon Athletica has a consensus Hold rating among 25 Wall Street analysts. That rating is based on five Buy, 19 Hold, and one Sell recommendations issued in the last three months. The average LULU price target of $204.82 implies 23.15% upside from current levels.
