But Estee Lauder won't kiss and make up and agree to the settlement, which would have Target give up the remaining counterfeit products while maintaining its innocence.
Estee Lauder is seeking legal action to protect its brands and the distributors of its official products, including Australian department stores Myer and David Jones.
Lawyers for MAC will not settle until Target admits guilt and agrees that the products it obtained are counterfeit.
The distribution of fake products became a legal case after the company discovered Target was selling fake cosmetics under MAC branding. A spokeswoman for Target said MAC cosmetics sold in the chain were bought from an official wholesaler in Arizona and then shipped to Australia.
"Target Australia is not an authorised retailer of MAC Cosmetics and we did not supply any MAC products to Target Australia," said a statement from MAC.
Target has taken the products off its shelves, and the parties will resume legal proceedings in the next few weeks.
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