US warehouse retailer Costco could be up for a $19 million damages payout after a court ruled it was passing off engagement rings as Tiffany & Co products.
The dispute between the two retailers is based on a wedding gift registry service launched by Costco which included engagement rings, presented in a Tiffany style, but labelled on some signage as “Tiffany engagement rings”. Effectively making them Tiffany copies.
Rather than seeing its normal trademark blue, Tiffany saw red and sued Costco for trademark infringement and counterfeiting on the grounds some Costco shoppers believed they were getting real Tiffany rocks at rock-bottom prices.
A US District Court this week agreed, ruling Tiffany & Co is entitled to $19.3 million in damages for trademark infringement, counterfeiting and punitive damages.
Costco’s defence, that it was using ‘Tiffany’ as a generic term, and not selling Tiffany copies, per se, failed to impress the judge.
The decision effectively prevents Costco from using the term ‘Tiffany’ on its own, but the court judgement said appending words like ‘setting’, ‘style’ or ‘set’ would be considered legal.
Costco, which points out Tiffany was able to find “fewer than 10 customers” who thought they were getting a real Tiffany diamond ring, plans to appeal the decision.