Coach Sues Kansas Business, Employee for Fake Goods

Luxury goods manufacturer Coach has sued a Kansas store, its owner and an employee for allegedly selling phony items bearing its brand name.

The civil lawsuit filed Friday in U.S. District Court is the latest legal action taken against The Fabulous Store owner Glenda Morgan, 54, of Andover.

Last month, a federal jury indicted Morgan and the store on charges of trafficking in fraudulent goods imported from China. The criminal charges accuse her of selling handbags, wallets, sunglasses, jewelry and other items bearing counterfeited trademarks of such manufacturers as Chanel, Christian Dior, Prada and Burberry, among others.

In its complaint, Coach asked the court to block the Wichita store from selling its fraudulent goods and to order it to destroy any remaining inventory. The company also seeks damages of more than $2 million for each counterfeited trademark. The civil lawsuit alleges copyright and trademark infringement, unfair competition, unjust enrichment and trademark dilution.

Investigators for Coach were with law enforcement agents when search warrants were executed April 9 at the store and at employee Frances Wuestewald’s residence, according to the civil complaint. The representatives helped agents identify, sort, tag and photograph the counterfeit merchandise, which included 35 items bearing Coach trademarks, according to the firm’s filing.

“Coach has expended substantial time, money and other resources in developing, advertising, and otherwise promoting the Coach Marks,” according to its filing. “As a result, products bearing the Coach Marks are widely recognized and exclusively associated by consumers, the public, and the trade as being high quality products sourced from Coach, and have acquired strong secondary meaning.”

The company said its annual global sales exceed $4.5 billion dollars.

Morgan declined comment Monday. Wuestewald did not immediately respond to a phone message left at her home.

The store’s business practices came to light after a postal carrier assigned to the store’s route told the Department of Homeland Security the shop received about six to seven packages a month from China, according to a DHS affidavit. An inspection found numerous counterfeit items, and agents eventually seized nearly 2,600 items valued at about $1.5 million if authentic.

Federal agents went to Morgan’s home in January 2011 and informed her of federal laws prohibiting the sale of counterfeit merchandise. Morgan allegedly asked at the time why she was being singled out when others were doing the same thing, according to the affidavit, but agreed to abandon the seized items.

In March, agents acted on a tip that Morgan had resumed selling counterfeit goods. An undercover officer saw several name-brand handbags, wallets and sunglasses, as well as a sign stating the goods were replicas.

If convicted of the criminal charges, Morgan faces up to 10 years in prison and a fine of up to $2 million.