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Garmentos duking it out…

The dispute between Polo Ralph Lauren Corp. (RN) and Jones Apparel Group (MAXS) over licensing agreements for Jones’ popular Lauren by Ralph Lauren line continues to drag on, according to Polo’s most recent 10-K and the stakes for both companies are getting higher. Last June, Jones sued Polo for $550 million after the company cancelled the Lauren licensing agreement that wasn’t set to expire until the end of 2006 because Polo claimed that the company wasn’t meeting sales quotas on the Ralph by Ralph Lauren line, under a second licensing agreement between the two companies. In 2003, Jones sold $476.4 million worth of Lauren by Ralph Lauren clothing and $30.7 million of Ralph by Ralph Lauren clothes. Polo countersued, hired a former Jones executive in what Jones claims is a violation of her employment contract, and also asked the court to dismiss Jones’ suit. But in March, a judge threw out Polo’s claim, which Polo is now appealing. According to Polo’s K, a hearing was held last month on the matter and a decision is pending. What isn’t clear from either company’s filings is how much this legal wrangling over the past year is costing shareholders. But suffice it to say that New York lawyers don’t come cheaply.