Two of the biggest athletic apparel companies are about to go to war, this time, in court and over a sports bra.
Lululemon Athletica (NASDAQ: LULU), a Vancouver-based athletic apparel company is suing rival, Under Armour (NYSE: UAA) for copying a sports bra design. The bra in question is Lulu's Energy Bra, which retails for $52 USD, which Lulu claims UA has copied. The Under Armour products ranging from their Armour Strappy ($22-$29 USD) to their Armour Eclipse Low Impact which retails for $39 USD.
The suit focuses on patent and trademark infringements, and Lulu claims "Under Armour's unauthorized actions have caused an will continue to cause irreparable damage to Lululemon and its business." Baltimore-based Under Armour responded in wake of the suit, only saying that they take "intellectual property rights of others very seriously."
These two companies are looking to take a piece of the growing market for sports bras, which currently accounts for more than $1 billion in U.S. sales a year. For Lululemon, securing their spot within any market is a key component of their business plan, seeing as they currently have over three dozen patents for their products, one of which happens to be for the sports bra in question.
To secure the patent for this particular bra, they had to prove that the straps were an original design, and that it has ornamental value (as opposed to being strictly functional).
Lawyers have said this occurrence is unusual in the fashion industry, especially since such companies would not usually go through the trouble and lengthy process of securing patents for their products. Intellectual property lawyer Laura Ganoza has said that, considering an article of clothing may only last a season or less, it is surprising that a company would go through a process that could take a year and a half just to get the patent.
Another intellectual property lawyer from Minnesota chimed in, saying that if this case moves forward, he expects that it will focus predominantly on Lulu's design.
Lulu however, may not be too concerned with going to court with competitors. They took Calvin Klein to court back in 2012 in a dispute over a waistband design on its Astro Pant. The companies later settled out of court for an undisclosed sum.
It seems that Lululemon is trying to intimidate its competitors, establish their dominance, stand their ground, and deter competitors from copying their designs. They are establishing themselves as a legitimate player in the bra industry by doing their research, and protecting their interests by obtaining rights through patents and trademarks, so that if a company were ever to copy a design, they open themselves up to legal problems.
If this suit ends badly for Under Armour, it has the potential to skyrocket Lulu's position in the sports bra market and bra industry, and also create more opportunity for start ups and online businesses to step in amid Under Armour's potential downfall and loss of share in the market. There is also potential for Under Armour to have difficulty recovering and gaining back a percentage of the market, if while they suffer from this suit, the start ups, online businesses, Lululemon, and other major players take over completely.
On the other hand, with Victoria Secret slowly declining, it could allow for Under Armour to leap back into the market. However, with it being an industry with $1 billion in sales in the U.S. alone, Under Armour should have no problem with their line of sports bras.
As more develops and Under Armour responds, the fate of the Baltimore-based company will become clear. It is how they plan to recover that will seal their fate. Until then, we'll have to wait and see.
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