Coach sues Las Vegas companies over alleged counterfeit items

By Steve Green (contact)

Thursday, April 1, 2010 | 2:11 p.m.

Luxury goods maker Coach Services Inc. is suing two Las Vegas companies, charging they’ve been selling counterfeit goods bearing false Coach trademarks.

A suit filed in U.S. District Court in Las Vegas on Tuesday against a company called Viva Vegas says Coach investigators in February obtained various counterfeit products bearing marks and designs identical to Coach trademarks and designs at various retail stores in Las Vegas operated by Viva Vegas.

"Plaintiff has expended substantial time, resources and effort to obtain an excellent reputation for itself and its family of (trademarks)," New York-based Coach said in its lawsuit. "Defendant is now unjustly enriched and is benefiting from property rights that rightfully belong to plaintiff."

Coach makes leather goods and products from other materials such as handbags, wallets, travel cases, briefcases, planners, diaries, watches, eyewear, footwear and apparel.

Also this week, Coach filed another trademark lawsuit against Las Vegas company Rolands Boulevard Inc. charging investigators obtained counterfeit products bearing false Coach trademarks from what Coach described as Rolands Boulevard’s location at 3700 W. Flamingo Road.

Coach said in that lawsuit it "has been injured and will continue to suffer injury to its business and reputation unless defendants are restrained by this court from infringing plaintiff’s trademarks."

Officials at Rolands Boulevard could not be located for comment.

Ariel Akerman, managing member of Arelni LLC, which has about 10 Viva Vegas souvenir shops in the Las Vegas area, on Thursday disputed the allegations in the lawsuit.

He said Viva Vegas shops do not represent to consumers that the goods in question are authentic Coach products.

"These are legal knockoffs," Akerman said.

Viva Vegas sells "knockoff" products competing with handbags and other products sold by Coach in Las Vegas tourist venues such as the Forum Shops at Caesars, the Fashion Show mall, the Shoppes at the Palazzo, the Las Vegas Premium Outlet Center, the Las Vegas Outlet Center and the Fashion Outlet of Las Vegas in Primm.

Coach products also are sold at the Galleria at Sunset mall in Henderson and the Meadows Mall in Las Vegas.

Todd Kahn, general counsel of Coach, said in an interview that the company has filed about 170 lawsuits in the past year as part of an anti-counterfeiting program called "Operation Turnlock," in reference to the locks on some Coach products.

Kahn said the company sees more counterfeiting in tourist destinations such as Las Vegas, Los Angeles and New York than in non-tourist destinations.

That’s because tourists generally have the time and money to make impulse purchases during vacations and are exposed to lots of retailers, like Viva Vegas, targeting tourists.

In announcing Operation Turnlock in May 2009, Coach said it would aggressively pursue litigation against those involved in the distribution and sale of counterfeit products.

“We intend to pursue all infringers – no matter how big or small – using the strong state and federal laws to enforce our rights and protect against the devaluation of the brand,” Kahn said at that time.

“While Coach has successfully enforced its intellectual property rights around the world by working jointly with government agencies, law enforcement, and other brands, we have now added an additional component to our trademark enforcement efforts: a comprehensive national civil litigation program,” Kahn said in the 2009 announcement. “The goal of Operation Turnlock is to make it both more costly and increasingly difficult for vendors to purchase, sell, move, or store counterfeit products in the United States. We have a responsibility to protect the brand’s core values and further enforce our commitment to this global issue, starting with our home market.”

Targets of the program include large wholesale operations, small businesses, Internet sites, "purse party" operators, street vendors and flea markets selling Coach counterfeit products.

Counterfeit goods infringe on the reputation and value of legitimate intellectual property creators and the holders of these rights, and impose economic, social, and environmental harm and threaten human health and safety on a global level, Coach said.

Kahn this week said terrorist organizations have been linked to the counterfeit goods trade in which lookalikes of $300 products can be purchased for $30 or so.

Kahn said those selling counterfeits of Coach products cannot legitimately say they are unaware the products are counterfeit.

He said that's because Coach strictly limits where its products are sold. Coach brands are sold at the retail level only at Coach stores or through established department stores such as Dillard’s.