Lululemon stretches to reach Chinese counterfeiters

Lululemon Athletica Canada, a brand of yoga attire and running gear, has instigated a lawsuit against multiple China-based parties in an effort to combat online counterfeiting and protect US consumers.

The company filed the complaint at the US District Court for the Northern District of Illinois, Eastern Division, on Friday, April 20.

The Vancouver-based retailer, a “yoga-inspired athletic company”, said it has been “forced” to file the suit to “combat online counterfeiters” and “protect unknowing customers”.

Lululemon was founded in 1998 and its current market capitalisation exceeds $8 billion, according to the suit, but the brand’s success has resulted in “significant counterfeiting”: it claimed to have identified “thousands” of domain names which contribute to the sale of fake products.

Lululemon owns various registered marks in the US, including word mark ‘Lululemon’ (4,391,115), a logo design featuring ‘Lululemon athletics’ (4,367,598), and a figurative design without the words (2,460,180). 

The marks cover a variety of clothing and accessories, and Lululemon owns similar registrations for retail store services, online retail services, entertainment services, and exercise equipment. Lululemon described its trademark registrations as “critical” to its business and success.

Lululemon identified the defendants as being individuals and businesses based in China. The yoga brand said they use fictitious names to operate online marketplaces and target consumers in the US with fake branded products.

They create online retail platforms “by the hundreds” and use “unique identifiers” of the legitimate brand to sell similar products, Lululemon explained, and “attempt to avoid liability by going to great lengths to conceal both their identities and the full scope and interworking of their counterfeiting operation”.

For example, the yoga brand said counterfeiters deceive consumers by using Lululemon’s trademarks and designs on illegitimate websites and fake products, as well as on social media pages.

Lululemon said the counterfeiters also ship products in small quantities to avoid detection by US customs officers, and regularly move funds through PayPal accounts outside of the US to avoid enforcement efforts.

The yoga brand is seeking injunctive relief and triple damages for the dilution and tarnishment of its trademarks, which it said has caused irreparable harm. Alternatively, Lululemon has requested statutory damages of $2 million for each infringing use of its marks.

It asked the court to transfer a number of domain names associated with the defendants to Lululemon in order to “disable” the counterfeiting activities and also order third party platforms (including eBay and Alibaba) to cease providing services to the defendants.