VANCOUVER, Canada — Lululemon Athletica Inc., facing increased competition from rival athletic-apparel companies, has dropped a case in which it accused Under Armour Inc. of infringing patents for the designs of sports bras.
The companies jointly asked a judge to dismiss the lawsuit last week in federal court in Delaware, where Lululemon claimed several Under Armour sports bras infringed two patents for a criss-crossed strap design and copied the distinctive look of its Energy Bra.
Lululemon has scant opportunities to attack competitors in court. The company generally doesn’t own patents in the technology, fabrics or processes that make its products, leaving its portfolio of patented designs as its strongest stick to wield. Lululemon has warned investors that it must rely on those patents to fend off rivals who have deeper pockets for big marketing campaigns.
Nike Inc., the world’s largest sports brand, last week upped the ante. The company, in supplemental documents to an investor presentation, said it planned to spend more on product development for items like sports bras. To highlight new styles for workouts and leisure, Nike on November 1 will open pants studios in 5,000 stores, which will dwarf Lululemon’s footprint of 421 locations.
Sports bras, as an apparel category, have grown more than 20 percent year-over-year to about $3.5 billion in the US in 2016, according to data from A.T. Kearney. And Amazon.com Inc. has begun pushing into the activewear market, tapping athletic-apparel suppliers such as Eclat Textile Co., a Taiwanese company that also makes clothing for Nike, Lululemon and Under Armour.
Under Armour has struggled this year, as it continues to expand beyond its foundation in football workout gear. Its shares had declined 44 percent this year through Monday’s close, making it one of the worst-performing stocks in the Standard & Poor’s 500 Index. The company on Tuesday slashed its full-year revenue and earnings forecasts, posting its first sales decline as a public company.
The joint court filing last week in Delaware didn’t include financial details of any potential settlement. Lululemon had claimed that products such as Armour Eclipse Low Impact, Armour Shape Low Impact, UA On the Move and UA Printed Strappy Bra had improperly copied its Energy Bra.
Officials of Vancouver, Canada-based Lululemon and Baltimore-based Under Armour didn’t immediately respond to phone and email messages seeking comment.
In the complaint, Lululemon had sought cash compensation, an order blocking further infringement and to collect "the total profits realised by Under Armour from its infringement."
The case is Lululemon Athletica Canada Inc. v. Under Armour Inc., 17-cv-00915, US District Court, District of Delaware (Wilmington).
By Christopher Yasiejko, with assistance from Susan Decker; editors: David Glovin, Peter Blumberg and Joe Schneider.