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The Associated Press May 17, 2010, 5:29PM ET

Coach, Target resolve handbag infringement lawsuit

Coach Inc. and Target Corp. have settled a design infringment lawsuit, seven months after the upscale handbag maker charged that handbags the discounter was selling too closely resembled its own designs.

In a statement Monday, Coach said that all parties, including consumer goods sourcing company LF USA, "have amicably resolved the recent lawsuit." The terms of the settlement are confidential.

Coach filed the suit last October to impel Target to stop selling the bags. It sought an undetermined amount in damages, injunctive relief and attorney fees in its complaint filed in U.S. District Court in Manhattan.

The bags in question resemble Coach's Ergo bags, marketed as ergonomically correct, and its Signature Patchwork bags, which have patches of different fabrics. Both were introduced in 2008.

In the lawsuit, Coach claimed that Target began selling handbags with "exact and/or confusingly similar reproductions of Coach's Ergo designs and Signature Patchwork designs."

Coach also sued Minneapolis-based Target in 2006 claiming the retailer was selling a copy of one of its other handbags. The companies settled that case.

"We respect the integrity of all brands, including Coach, and are pleased that this matter has been resolved in a manner beneficial to all parties involved," said Rick Darling, LF USA president, in the statement. LF USA is a unit of Hong Kong's Li & Fung Ltd.

Coach's shares rose 14 cents to close at $40.20. Target's shares rose 88 cents, or almost 2 percent, to finish at $56.05.

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