Tommy Hilfiger Corporation (NYSE: TOM) said on Monday that its licensing subsidiary has filed a lawsuit against Goody's Family Clothing Inc, a Knoxville, Tennessee-based retailer of apparel with approximately 300 stores in the Southeast and Midwest.

The company alleged that Goody's has sold counterfeit Tommy Hilfiger products and has infringed upon Tommy Hilfiger's Flag logo trademark by selling garments under its "Mountain Lake Jean Company" and "Old College Inn" labels, which use an unauthorized imitation of the Flag design trademark and contain patches, labels, embroideries and tags that imitate the distinctive look of Tommy Hilfiger Jeans.

In addition, the complaint alleges that Goody's engaged in unfair competition by grouping counterfeit garments and infringing garments in the same location in their stores to create the impression of a Tommy Hilfiger in-store department.

Steven R. Gursky, counsel for Tommy Hilfiger, commented, "Tommy Hilfiger continues to be aggressive in its efforts to protect its brand name and its trademarks. In this case, our client is particularly concerned because consumers may not suspect that the Hilfiger goods they are purchasing from a retail chain like Goody's are counterfeit, or that the imitations of the Hilfiger Flag are unauthorized."

In addition to monetary damages, Tommy Hilfiger has asked the court to permanently enjoin Goody's from the unauthorized use of their trademarks through the sale or promotion of infringing goods.

Shares of Tommy Hilfiger were off 1/4 at 9-1/4 on the New York Stock Exchange, while Goody's Family Clothing shares were up 1/64 at 5-1/64 on the Nasdaq stock market.

Tommy Hilfiger Corporation, through its subsidiaries, designs, sources and markets men's and women's sportswear, jeanswear and childrenswear under the Tommy Hilfiger trademarks. Through a range of strategic licensing agreements, the Company is expanding its product lines to offer a broader array of apparel, accessories, footwear, fragrance and home furnishings. The Company's products can be found in leading department and specialty stores throughout the United States, Canada, Mexico, central and South America, Europe, Japan, Hong Kong and other countries in the Far East.