Costco found liable for trademark infringement/counterfeiting of Tiffany engagement rings

Recently, the United States District Court for the Southern District of New York found Costco liable for several trademark related claims brought by Tiffany & Co.[1] The dispute centered around Tiffany’s allegations that Costco sold diamond engagement rings bearing the Tiffany name and trademark in Costco stores.[2] The Court found that Costco had infringed upon Tiffany’s trademarks and otherwise engaged in trademark counterfeiting.[3] The Court supported its holding by finding that the evidence showed that Costco placed signs adjacent to the rings using the Tiffany name when in fact the rings were not manufactured by Tiffany.[4] The Court also found that Costco’s advertising practices confused consumers into believing that they had purchased authentic Tiffany rings “at a good price.”[5] Costco was also found to have willfully infringed the Tiffany trademarks as a result of evidence which “demonstrate[d] Costco’s explicit efforts to copy Tiffany’s designs” and intent to “deceive consumer with regard to the source of its jewelry.”[6]

Costco attempted to argue that Tiffany’s various trademarks related to jewelry products had become generic, and thus not entitled to trademark protection. [7] The Court noted that a mark is “‘generic if, in the mind of the purchasing public it does not distinguish products on the basis of source but rather refers to the type of product.’”[8] The Court rejected Costco’s claim siding with consumer survey results submitted by Tiffany showing that the majority of the public viewed Tiffany as a brand name.[9] Tiffany also brought a claim for trademark dilution and sought monetary relief; however, the Court found that Tiffany could not recover damages under this claim since Tiffany first began use of its marks before October 6, 2006.[10]

Please contact our office if you have any questions regarding the information in this article.

Daniel Devine, Esq.
Santucci Priore, P.L.
Shareholder

[1] See, Tiffany and Company v. Costco Wholesale Corp., No. 13CV1041-LTS-DCF, 2015 WL 5231240 (S.D.N.Y. Sept. 8, 2015).

[2] Id. at 2015 WL 5231240 at *2.
[3] Id. at 2015 WL 5231240 at *11-12.
[4] Id. at 2015 WL 5231240 at *2.
[5] Id. at 2015 WL 5231240 at *6.
[6] Id. at 2015 WL 5231240 at *8.
[7] Id. at 2015 WL 5231240 at *13
[8] Id. (internal citations omitted).
[9] Id. at 2015 WL 5231240 at *13-16.
[10] Id. at 2015 WL 5231240 at *19.