Lululemon has filed a patent lawsuit in court, accusing PVH Corp.’s Calvin Klein brand and manufacturer G-111 Apparel Group of infringing three patents on the design of its yoga pants
Canaccord Wealth Management came up with this clever headline in its Morning Coffee Report, referring to a patent lawsuit filed recently by Lululemon Athletica Inc. (TSX: T.LLL, Stock Forum) (NASDAQ: LULU, Stock Forum).
As reported by Reuters News service and others, Lululemon has filed a patent lawsuit in the U.S. Federal Court in Delaware, accusing PVH Corp.’s (NYSE: PVH, Stock Forum) Calvin Klein brand and manufacturer G-111 Apparel Group (G111) of infringing three patents on the design of its yoga pants.
These are allegations that have yet to be tested in a court of law.
Lululemon’s design patents protect the appearance of goods in contrast to more common utility patents, which focus on how things work. Lululemon’s filing says some Calvin Klein “Performance” pants infringe patents on its “Astro Pant.”
In court, Lululemon will have to show that its rival’s products look like the patented pants. The defendants will likely strike back with “prior art” - evidence that others made similar products before Lululemon.
Alexander Poltorak, CEO of General Patent Corp., says, “It’s kind of difficult in clothing to design something which is completely new, because, you know, the history of clothing design goes for several thousand years.”
In addition to companies allegedly infringing on its patents, Lululemon is also facing competition from the likes of Gap Inc. (NYSE: GPS, Stock Forum), Under Armour (NYSE: UA, Stock Forum) and Nike Inc. (NYSE: NKE, Stock Forum), writes Canaccord. It went on to say that Lululemon has been the target of short sellers, as of July 31, 2012, the company had short interest of 18.7 million shares.
Unchanged at $60.80, Lululemon has a market cap of $6.5 billion, based on 106.6 million shares outstanding. The 52-week range is $80.08 and $42.50.