A four-year battle over whether "Tiffany" is a brand or style has ended in favor of Tiffany & Co., though Costco still intends to challenge the ruling.
As of now, the big-box store owes Tiffany & Co. $19.4 million in damages after it was discovered the company was selling rings marketed as "Tiffany," which some customers believed to be actual Tiffany & Co. products.
In the ruling, U.S. District Judge Laura Swain wrote this: "The Court finds that Costco used Tiffany's trademark to attract customer attention to the fine jewelry items by indicating that the items accompanied by such signage were Plaintiffs' products although they were in actuality generic items."
The issue started back in 2013, when a customer in California alerted the jewelry store about Costco's ring display, Consumerist reports. Tiffany then accused Costco of trademark infringement, counterfeiting, false advertising and deceptive business practices.
Given that Costco does sell other name-brand products at a steep discount, including Cartier and Chanel, Tiffany argued that it was not unreasonable for customers to believe the diamond engagement rings labeled "Tiffany" were the real product.
For what it's worth, Twitter wasn't so sure about this, and the news has sparked a number of hilarious posts doubting why anyone would think Tiffany & Co. rings were sold at Costco.
Costco argued that "Tiffany" is a generic name used to describe rings, and pointed to an industry trend of labeling rings as Tiffany-style. However, not all Costco signage used phrases like "Tiffany-style" or "Tiffany-setting."
In addition to the fine, Costco is now banned from selling products labeled as Tiffany without an additional modifier, like style or setting. The fine, advised by a jury, includes $11.1 million for the money Tiffany & Co. lost from these sales (or 3x the profit Costco made), as well as $8.25 million in punitive damages, according to the ruling.
In a statement released Monday, Costco wrote that fewer than 10 of the 2,500 customers who bought these rings were confused by the signage, and that the rings were not sold in Tiffany blue boxes or labeled with the jewelry store's name. The statement says the company believes the ruling is a result of "multiple errors in pretrial, trial, and post-trial rulings" and intends to appeal.
