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Sunday, April 25, 2010

Flea market owner sued

Coach Inc., the maker and distributor of more than $3 billion worth of leather purses and other fashion accessories, has sued the owner of a Derry flea market for letting a number of vendors-to-be-named-later sell knock-offs.

Coach filed the suit Thursday in U.S. District Court against Gata Corp. and Martin Taylor, its president and owner, who owns the property of the Grandview Flea Market, where various vendors peddle their goods on Island Pond Road in Derry from 8 a.m.-4 p.m. each weekend. The suit also targets up to 20 “John Doe” vendors reserving the right to name them later in an amended complaint.

It was this same flea market that federal authorities raided in June and arrested three people for trafficking in counterfeit goods.

A message left with Taylor at his Salem home was not returned by NHBR deadline. A person answering the phone at the number of the Web site advertising the flea market refused to identify himself, but said he was not Taylor, nor did he work with him, but he was just vendor who put together a Web site for him.

Coach purses, handbags and accessories, with its trademark half rink (CC) design, have been hot fashion items for years – “enormously popular and even iconic” according to the lawsuit. The company, founded in 1941, employs 12,000 people, had $3.2 billion in sales in fiscal 2009 (which ended June 30, 2009), and posted net income of $623 million.

Like any fashion accessory, Coach products have spewed an industry of knock-offs, that – according to Coach’s annual statement – it must sue from time to time in federal court. And there is some evidence that Coach fakes were being sold at Grandview.

Last June, the federal Office of Homeland Security, U.S. Immigration and Customs Enforcement and the Derry Police Department raided the market seizing thousands of counterfeit accessories from four vendor areas of the market and charged three men from Queens, N.Y. – Guo Qiao Lin, 32, of Flushing, N.Y., Peng de Lin, 35, of Flushing, and Junwu Chen, 40, of Woodside, N.Y. – with trafficking counterfeit goods made by Coach, as well as other designers such as Prada, Channel and Louis Vuitton.

Guo Quia and Peng de Lin were convicted at a jury trial of trafficking counterfeit goods on April 12 and 16 respectively. Chen was found not guilty on similar charges Wednesday.

Coach, however, isn’t accusing Gata Corp. or its owner, Taylor, of selling the knock-offs, but allowing them to be sold. Taylor, according to the suit was the “moving, active and conscious force behind the operations, actions and inactions of Gata Corporation and the Market” and involved in its day-to-day operations including the renting and leasing of space by vendors.

“Gata and Taylor have retained the sole discretion to permit or to prohibit vendors from admission to the Market and have exclusive control over whether vendors may conduct business at the Market,” the suit said. And Gata and Taylor “have been able to ascertain the items sold” by the vendors, a “substantial amount are residents of the State of New York who travel to New Hampshire for the purpose of selling said counterfeit merchandise” much of it manufactured in China, Thailand and eastern Asian countries.

These items are knock-offs, “a fact evident not only from the obviously copied design elements, but also from the clandestine and secretive manner in which many vendors display and sell such items.” According to the lawsuit, the June raid found 13,278 items, including 7,515 counterfeit Coach accessories.

Coach maintained that counterfeit sales are still going on, claiming its agents purchased Coach counterfeits from four separate venders as recently as March 20.

The items, said the suit, were hidden from display, and were only brought out when asked.

Taylor should have known this, said the suit, since Coach advised him of the fact last August.