Estee Lauder and Walmart Move Forward with Counterfeit Lawsuit

Estée Lauder Companies has gained a procedural victory in its intellectual property dispute against Walmart for allegedly selling counterfeit products. A federal judge allowed the company to broaden the scope of its counterfeit lawsuit against the retail giant.

The legal clash began on February 9, 2026, when Estée Lauder and its subsidiary brand portfolio filed a federal lawsuit accusing Walmart of facilitating widespread trademark infringement and false designation of origin.

In response to the initial lawsuit, Walmart stated it maintains a zero-tolerance policy for counterfeit goods and defended its operational protocols.

Recently, U.S. District Judge Hernan Vera of the Central District of California denied Walmart’s motion to dismiss the lawsuit, ruling that Estée Lauder may advance claims extending past the initial 17 products verified as fake.

Walmart contended that Estée Lauder Cos. failed to present adequate evidence linking the retailer to unverified merchandise listed by marketplace vendors. 

Additionally, Walmart argued that claims should be limited strictly to tested items, but the court ruled that such a restriction was unjustified at this early stage of litigation.

Judge Vera rejected these arguments and characterized Walmart’s request for partial dismissal as “unjustified at this stage,” allowing Estée Lauder to move forward with discovery across a wider range of items.

With the court giving Estée Lauder the “go ahead” to pursue broader discovery, the case could set significant legal precedents regarding how much responsibility major e-commerce platforms bear for policing third-party marketplace sellers.

The initial complaint centered on unauthorized third-party vendors offering non-genuine, knockoff luxury goods on Walmart’s e-commerce platform. 

The suit highlighted fake versions of several high-profile flagship products, including Estée Lauder Advanced Night Repair skincare, Tom Ford and Le Labo fragrances, Clinique and La Mer skincare treatments, and Aveda hair care accessories and brushes.

Estée Lauder also accused Walmart of trade dress infringement, alleging that third-party sellers copied trademarked product designs, such as Tom Ford’s signature rectangular perfume bottles and monochrome labels. 

The complaint also alleged that Walmart used Estée Lauder trademarks in its search engine optimization tools to direct consumer traffic to unauthorized listings, generating financial gains for the platform.