Flea Market’s Former Owner May Still Have Liability

The former owner of a Londonderry flea market on Route 102 near the Hudson border is being sued by Coach, Inc., a manufacturer of leather products such as handbags.

The suit alleges that  Peter J. Sapalis knew of and did nothing to stop the sale of counterfeit Coach products.

Coach claims contributory trademark counterfeiting, contributory trademark infringement, contributory trade dress infringement, contributory false designation of origin and false advertising, contributory trademark dilution, contributory copyright infringement, state common law trademark infringement and state common law unfair competition.

According to the United States District Court for the District of New Hampshire in Coach, et al vs. Peter J. Sapalis, et al, the court granted a motion for summary judgment requested by Sapalis on the last count but denied it on all other counts.

According to court documents, Sapalis sold his flea market business to his daughter Alaina Paul and TABA Enterprises in February 2008. Most of the evidence presented by Sapatis and Londonderry Marketplace concerns events surrounding Sapatis’s sale of the flea market. In contrast, nearly all the evidence presented by Coach relates to events occurring after the sale.

The document states that since the sale of the flea market to Paul and TABA in 2008, Paul has paid Sapatis $12,000 each year toward the outstanding balance she owes him – currently $40,000 – although she is unsure how and when these payments have been made. Each of Paul’s payments is completely offset by an annual gift of $12,000 that Sapatis makes to Paul, and none of these transactions have been recorded, nor has interest accrued on the outstanding balance.

Coach, Inc. alleges in its civil suit that Sapatis and Londonderry Marketplace knew or should have known that copyright infringement and trademark dilution were being conducted on the property owned by Sapatis by businesses selling “knockoff” goods bearing the Coach brand.

The complaint states that “on or about June 26, 2011 an investigator for Coach visited Londonderry Marketplace and observed approximately 30 different vendors selling and/or offering for sale the infringing products. The investigator made six different purchases of the infringing products. The investigator handed Defendant Sapatis a cease and desist order. With Defendant Sapatis’ permission, the investigator and Sapatis’ assistant Linda Morrow handed cease and desist letters to the vendors selling and/or offering for sale the Infringing Products.”

The complaint further states that a letter in addition to the June 26, 2011 cease and desist letter was sent via FedEx by Coach, Inc. in-house counsel Tiffany Walden to 5 Avery Road and was signed for by a J. Sapatis.

The complaint states that on Aug. 13, 2011 a Coach investigator visited the Marketplace and found approximately 200 counterfeit Coach products and bought a counterfeit item.

On April 29, 2012 the complaint states that another investigator from Coach visited Londonderry Marketplace and observed vendors selling counterfeit Coach, Inc. products, which triggered another cease and desist letter dated May 14, 2011.

On Oct. 21. 2012, an investigator from Coach, Inc. visited Londonderry Marketplace and observed approximately 12 vendors selling counterfeit Coach products. The investigator made six different purchases, including a baseball cap, wallet, belt, two wristlets and a hat and scarf set.

The complaint states that with the hand delivered cease and desist letter, the cease and desist letter handed out to vendors with Sapatis’ permission, and the FedEx cease and desist letter, Sapatis knew of the infringements to Coach’s product, and subsequent visits by investigators showed that Sapatis did nothing to stop the infringement.

All of the counts stem from the allegation that Sapatis knew of the infractions at his business and by not stopping them, contributed to the infractions.

Coach in its complaint asks the court to grant an injunction restraining Sapatis from: manufacturing, importing or advertising or selling any products that bear the Coach Trademark or engaging in any practice or activity constituting unfair competition with Coach; engaging in any activity that might dilute the Coach brand; requiring Sapatis to recall from any distributor and retailers and to deliver to Coach for destruction any and all remaining inventory of the infringing products; requiring Sapatis to provide the court and Coach a written report that he has complied with the injunction; directing such other relief as the court may deem appropriate; awarding Coach $2 million per counterfeit mark per type of infringing products or alternatively ordering Sapatis to account to and pay Coach all profits realized by their wrongful acts, and awarding Coach its actual damages and directing that such profits or actual damages be trebled.

The Complaint also asks that Coach be awarded statutory damages, actual and punitive damages, attorney fees, investigatory fees and expenses to the full extent of the law, awarding Coach pre-judgment interest on any monetary award and awarding Coach further relief as the court deems just and proper.

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