Trademark Enforcement in Focus: Lessons from Lululemon v. Costco
In June 2025, Lululemon initiated a federal lawsuit against Costco Wholesale Corporation, alleging multiple counts of trademark infringement related to Costco’s private-label apparel offerings. The case, filed in the U.S. District Court for the Central District of California, offers a timely and instructive reminder of the breadth and importance of trademark rights. This is particularly relevant with respect to product naming, marketing language, and brand architecture.
Although the dispute arises from the fashion and retail sectors, the legal principles it highlights apply broadly across industries.
The Allegations
Lululemon’s complaint asserts that Costco has infringed upon its registered and common law trademark rights by selling apparel products that allegedly create confusion among consumers regarding their origin or affiliation. Specifically, Lululemon takes issue with Costco’s use of:
The SCUBA® trademark (U.S. Reg. No. 4,333,759), associated with Lululemon’s popular line of hooded sweatshirts
The product designations DEFINE® and ABC, which Lululemon asserts function as source-identifying marks
The color name Tidewater Teal, which Lululemon claims has acquired distinctiveness through extensive use and consumer recognition
Lululemon alleges that Costco marketed and sold several apparel items under names and designs that are likely to cause confusion, mistake, or deception among consumers. These actions are claimed to violate the Lanham Act (15 U.S.C. §§ 1114 and 1125), as well as related California state laws.
The complaint seeks injunctive relief, monetary damages, attorneys’ fees, and an accounting of profits derived from the allegedly infringing conduct.
Key Trademark Principles at Issue
This case involves several fundamental concepts in trademark law. Each carries important implications for brand owners and retailers.
1. Trademark Rights Extend Beyond Logos
While visual logos are the most commonly recognized form of trademark, protection also applies to names, phrases, stylizations, and in some cases, product color descriptors. Lululemon’s claim involving “Tidewater Teal” demonstrates how non-traditional brand elements can acquire trademark significance through consistent and exclusive use.
2. Descriptive Terms May Become Protectable Through Secondary Meaning
Words or phrases that may initially appear descriptive or generic can become legally protectable trademarks if they acquire secondary meaning. This occurs when consumers come to associate the term with a specific source. Lululemon contends that terms such as “SCUBA” and “Tidewater Teal” have developed secondary meaning through widespread use, media exposure, and market performance.
3. Trademark Infringement Does Not Require Intentional Copying
A defendant may be liable for trademark infringement based solely on the likelihood of consumer confusion. Intent to infringe is not a necessary element. Even where use is unintentional or based on independent development, liability may still attach if the similarity between marks misleads consumers.
4. Private-Label and In-House Brands Must Adhere to Trademark Standards
Costco’s role as a major retailer and private-label operator does not shield it from trademark liability. Retailers and manufacturers developing store brands must ensure that product names, identifiers, and marketing materials are clearly distinguishable from those of other established brands.
Practical Implications for Brand Owners and Retailers
The Lululemon v. Costco matter highlights several best practices for managing and protecting trademark assets.
Register All Key Brand Elements
Companies should proactively register product names, sub-brands, slogans, and other identifiers that play a role in brand recognition. Federal registration provides important legal presumptions and facilitates enforcement.
Monitor for Potential Infringement
Routine monitoring of the marketplace and competitors is essential to identify unauthorized use of similar marks. Early detection allows for prompt enforcement, which can help maintain the strength of the brand.
Evaluate Naming Conventions for New Products
Before launching new offerings or entering into private-label agreements, companies should assess the distinctiveness and clearance status of proposed brand names and designations.
Preserve and Document Use
To support claims of secondary meaning or common law rights, businesses should maintain thorough documentation of their use of brand identifiers, including advertising materials, sales data, media mentions, and customer engagement.
Train Marketing and Product Teams on Trademark Awareness
Cross-functional coordination between legal, marketing, and product teams helps ensure that brand strategy aligns with trademark protection goals and mitigates the risk of accidental infringement.
Conclusion
The Lululemon v. Costco litigation illustrates a sophisticated and assertive approach to trademark enforcement. It reinforces the idea that trademarks include far more than logos and that even color names and product lines can serve as protected identifiers of source. More broadly, the case serves as a reminder that trademark protection is a critical component of business risk management and brand strategy.
Companies that treat their trademarks as core business assets and implement systems to register, monitor, and enforce them are far better positioned to protect their market position and avoid costly disputes.
Contact Us
If you have questions regarding the protection or enforcement of your trademarks, or if you are concerned about potential risk exposure from current branding practices, please contact our intellectual property team for a confidential consultation.