Luxury goods firm LVMH has sued Wal-Mart, claiming the world's largest retailer is selling illegal copies of its Fendi-brand products in some shops.
Consumers keep snapping up fake designer goods at bargain prices
According to the lawsuit, Wal-Mart is selling fake handbags, wallets and key chains at Sam's Club stores in states including New York and California.
LVMH complained that the Fendi goods were being sold as "genuine" at prices that were discounted as much as 70%.
Wal-Mart did not make an immediate comment in response to the lawsuit.
An increasing number of high-end designer companies are turning to the courts in an effort to stem a rising tide of cheaper counterfeit products that are hurting their sales and denting their brand image.
It's not always easy to tell the fake goods from the real thing
Many of the bags and other products are produced in Asia and sold in markets. However, a significant number find their way into well-known retailers, analysts said.
Earlier this year, LVMH also took legal action against French retailer Carrefour, accusing it of selling fake handbags in China.
Fendi, which has a chain of own-name boutiques and sells its products through selected department stores in top locations, is seeking damages from Wal-Mart and wants any illegal copies of its goods destroyed.
The company cited one example of a Sam's Club store in Las Vegas selling one of its handbags for $295.03 (£160) compared with the recommended retail price of $925.
Wal-Mart's Sam's Club shops sell everything from groceries to office supplies.