In 2013, Tiffany & Co. sued warehouse retailer Costco following their discovery that Costco had allegedly been selling engagement rings having the label “Tiffany”, which did not come from them. Tiffany sued Costco for trademark infringement, counterfeiting, deceptive business, and for selling the rings in its stores as far back as 2007.
In 2016, a jury found Costco should pay back its profits, which it made from the rings, and awarded punitive damages for committing trademark counterfeiting and infringement.
A U.S District Judge in New York City, Laura Taylor Swain, confirmed the verdict that the ring sold by Costco did not belong to Tiffany & Co. and therefore Costco is liable for selling the engagement rings labeled “Tiffany”.
According to the Judge Costco salespeople described the jewelry as Tiffany rings, and “were not perturbed” by angry customers who realized the rings were not manufactured by Tiffany.
“Costco’s upper management, in their testimony at trial and in their actions in the years prior to the trial, displayed at best a cavalier attitude toward Costco’s use of the Tiffany name in conjunction with ring sales and marketing,” Judge Swain wrote.
Costco has been ordered to pay more than $19 million for selling generic solitaire diamond engagement rings marketed as “Tiffany”. The Judge also barred Costco from selling products labeled as “Tiffany” unless they come from Tiffany & Co, or use the modifiers Tiffany “setting,” “set” or “style,” according to the Reuters report.
While reacting to the decision, Costco said it will appeal the decision, calling the ruling “a product of multiple errors in pretrial, trial, and post-trial rulings.” Costco said on Monday that the case is not related to counterfeiting at all and that the rings were not stamped with the Tiffany & Co name and were sold in plain beige and brown wooden boxes rather than the famous blue Tiffany boxes.