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Lululemon suing alleged web of overseas counterfeiters

Robert Channick, Chicago Tribune on

Published in Business News

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, British Columbia-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.

Canada Goose sues alleged Chinese web counterfeiters, warns knockoff coats might not keep you warm »

Lululemon and a Chicago attorney representing the company in the lawsuit declined to comment Tuesday.

Founded in 1998, Lululemon helped create and grow the market for so-called athleisure wear -- athletic apparel that is also favored as streetwear. The company reported more than $300 million in net income on $2.3 billion in revenue for 2016, according to its most recent annual report.

Lululemon had 388 company-owned 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 percent 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.

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The company also is 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 for selling fake jackets online. A Chicago federal judge last year awarded rival Canadian outerwear-maker Moose Knuckles $52 million in damages and control of 33 websites accused of selling knockoff 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.

(c)2018 Chicago Tribune

Visit the Chicago Tribune at www.chicagotribune.com

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