NEW YORK, March 4 (Reuters) - Coach says it does not want to be left holding the bag for Kmart.

Coach Inc (COH.N), maker of leather handbags, briefcases and other accessories, on Thursday 4 March accused Kmart Corp in a lawsuit of illegal counterfeiting by selling luggage with a look too similar to a pattern it has trademarked.

www.coach.com

A spokesman for Kmart, a unit of Sears Holdings Corp (SHLD.O), declined to comment, saying the company does not discuss pending litigation.

According to a lawsuit filed in Manhattan federal court, Kmart allegedly misappropriated Coach's "op art" design, which features four "C"s arranged in a square.

Coach alleged that on Jan. 25 it paid $79.99 for a black-and-white three-piece luggage set, including two suitcases and a satchel, at the Kmart store connected to New York City's Pennsylvania Station.

"The luggage set was examined by Coach and found to be counterfeit merchandise," reflecting a "confusingly similar" design and overall quality and craftsmanship that "does not meet Coach's high quality standards," Coach said.

Coach alleged that Kmart engaged in "illegal counterfeiting and infringing" to capitalize on its own reputation and confuse consumers.

"The average manufacturer's suggested retail price for an authentic Coach suitcase and satchel are approximately $500 and $350, respectively, and not $79.99," Coach added.

The lawsuit seeks to halt the sale of the alleged improper products, triple damages, punitive damages and other remedies.

Coach is based in New York, and Sears in Hoffman Estates, Illinois.

The case is Coach Inc et al v. Kmart Corp et al, U.S. District Court, Southern District of New York, No. 10-01731.

(Reporting by Jonathan Stempel; Editing by Phil Berlowitz)