Lululemon sues hundreds of online counterfeiters
Lawsuit claims foreign websites deceiving customers by selling fake apparel at discount prices
CHICAGO— Lululemon Athletica is suing an unidentified web of counterfeiters for allegedly selling knockoff yoga pants online.
The trademark infringement lawsuit, filed Monday in federal court in Chicago, claims hundreds of websites are diluting Vancouver-based Lululemon’s brand and deceiving consumers with fake leggings, sports bras and other apparel offered at steep discounts. The company’s lawsuit alleges the counterfeiters are based in China “or other foreign jurisdictions.”
“The success of the Lululemon brand has resulted in its significant counterfeiting,” the lawsuit says. “Despite Lululemon’s enforcement efforts, defendants have persisted in creating the . . . internet stores.”
Beyond aggressively marked-down activewear bearing Lululemon-branded names, the counterfeit websites have “virtually identical layouts” and share similar irregularities, including “the same incorrect grammar and misspellings,” according to the lawsuit.
Lululemon and a Chicago attorney representing the company in the suit declined to comment Tuesday.
Founded in1998, Lululemon helped create and grow the market for so-called athleisure wear — athletic apparel that is also favoured as streetwear. The company reported more than $300 million (U.S.) in net income on $2.3 billion in revenue for 2016, according to its most recent annual report.
Lululemon had 388 companyowned retail stores at the end of the third quarter, including about a dozen in the Chicago area.
It also sells merchandise through its website, which was the primary driver of a 13-per-cent increase in direct-to-consumer revenue in 2016, according to the company.
The trademark lawsuit is seeking to shut down the alleged fake websites and award Lululemon “all profits realized” by the defendants or statutory damages of $2 million for each alleged misappropriation of Lululemon trademarks.
The company is also seeking an order that the domain names for the counterfeit websites be transferred to its control.
Last month, Canada Goose, the trendy Toronto-based outerwear manufacturer, filed a similar lawsuit against alleged Chinese counterfeiters, accusing them of selling fake jackets online.
A Chicago federal judge last year awarded rival Canadian outerwearmaker Moose Knuckles $52 million in damages and control of 33 websites accused of selling knock-off parkas.
The sale of alleged counterfeit apparel isn’t the only issue facing Lululemon. On Monday, the company announced that CEO Laurent Potdevin resigned after he “fell short” of standards of conduct, with three senior executives elevated to take over his responsibilities, according to a news release. The board, led by executive chairman Glenn Murphy, has begun a search for a new leader. With a file from Bloomberg