We study the propagation of two pulses with orthogonal linear polarizations in a nonlinear periodic dielectric structure with $X^{(3)}$ nonlinearity. Using an envelope- function approach, we derive the coupled nonlinear Schrodinger equations governing the spatio-temporal evolutions of the two orthogonally polarized modes in a nonlinear periodic structure. We then find their solitary-wave solutions referred to as coupled gap solitons. We show that two orthogonally polarized pulses can co-propagate as a coupled gap soliton through a nonlinear periodic structure while each pulse alone will be strongly reflected due to the Bragg reflection. Based on the results, we present an all-optical switching scheme which has a novel architecture and principle. We also study the stability of coupled gap solitons to find the dragging phenomena in a nonlinear birefringent periodic medium.