Clothier Haggar Accuses Former Supplier of Counterfeiting.

DALLAS, April 30, 2009 -- Dallas-based Haggar Clothing Co. filed a federal lawsuit today against one of its former suppliers and accusing them of selling unauthorized, sub-standard clothing with Hagar trademarks.

In 2007, Haggar contracted with Indian company Sai Lakshmi Industries Pvt. Ltd. (Sai Lakshmi) to produce several types of casual pants bearing Haggar's trademarks, which include HAGGAR and a stylized Q identifying the product as covered by Haggar's quality guarantee. Both HAGGAR and the stylized Q are federally registered trademarks.

On or about April 28, 2008, Haggar rejected a number of Sai Lakshmi's products due to quality defects and failures to make timely deliveries. At about the same time, Sai Lakshmi allegedly accepted an order from a Delware-based company called S.J. Clothing LLC for approximately 50,000 pairs of pants bearing the Haggar marks.

The purchase orders between Haggar and Sai Lakshmi prohibit the use of Haggar's trademarks and labels on merchandise unless manufactured for and shipped to, or on account of, Haggar. The purchase orders also required Sai Lakshmi to remove Haggar trademarks and labels from rejected merchandise at Sai Lakshmi's expense.

The complaint contains counts for trademark infringement, federal counterfeiting, trademark dilution, and unfair competition. S.J. Clothing LLC is not named as a co-defendant, but the Executive Director of Sai Lakshmi is.

If Haggar is successful, they could recover defendants' profits and any damages sustained by the plaintiff because their trademarks are federally registered. In assessing damages the court may enter judgment for any sum above the amount found as actual damages, up to three times. When a court finds a defendant intentionally counterfeited a registered trademark, the court must, unless the court finds extenuating circumstances, enter judgment for three times such profits or damages, whichever is greater, together with a reasonable attorney’s fee unless the Plaintiff elects for statutory damages up to $1,000,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed.

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