Costco must pay Tiffany & Co. $19.4 million for advertising knock-off rings

Paterniano Del Favero
Agosto 17, 2017

The case is Tiffany and Co et al v. Costco Wholesale Corp, U.S. District Court, Southern District of New York, No. 13-01041.

US District judge Laura Taylor Swain wrote in her opinion on Monday that the management of the company, "displayed at best a cavalier attitude toward Costco's use of the Tiffany name in conjunction with ring sales and marketing". Costco had argued it was using "Tiffany" as a generic term to describe a ring's setting.

The ruling that Costco should pay Tiffany $11.1 million plus interest is three times Tiffany's lost profit from Costco's actions.

But the judge found Costco's defenses "not credible", given evidence that displays of fine jewelry were a key part of the Issaquah, Washington-based company's marketing strategy.

Costco must pay Tiffany & Co. $19.4 million for advertising knock-off rings

Tiffany said in a statement to CNN the ruling "validates the strength of the Tiffany trademark and the value of our brand, and most importantly, sends a clear and powerful message to Costco and others who infringe the Tiffany mark".

Since 1886, when the company bought the patent from a New Jersey jeweler, Tiffany has so popularized the style that it is today commonly just referred to as a Tiffany setting. Tiffany first filed a complaint against Costco in U.S. District Court in NY on Valentine's Day in 2013 after learning of the practice in November 2012. The lawsuit charged that a consumer shopping in Costco's Huntington Beach, California warehouse complained that "Costco was offering for sale what were promoted on in-store signs as Tiffany diamond engagement rings".

A jury found Costco guilty of trademark infringement against the almost 180-year-old Tiffany & Co., based in New York City. "Costco intended that the word Tiffany in its signs convey only that the rings had this style of setting - not that the rings were Tiffany & Co. brand rings".

"Costco is a large corporation" that in 2014 reported "annual sales of over $113 billion" and "$2.4 billion in profits", the judge wrote.

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