Tiffany & Co. is one of the largest luxury jewelry retailers across the world. The company offers stunning jewelry pieces with unique designs and brilliant diamonds — and Costco can agree.
A federal district court judge recently ordered Costco to pay Tiffany more than $19 million for selling generic diamond engagement rings that were marked with Tiffany’s name, according to The New York Times.
The pronged setting rings Costco was selling were “commonly known as a ‘Tiffany’ setting,” even though the display cases described the rings as “Tiffany” rather than “Tiffany setting” or “Tiffany style.”
On Monday, Judge Laura Taylor Swain ruled that Tiffany is entitled to $11.1 million as profits for trademark infringement, plus interest and $8.25 million in punitive damages which was awarded by a jury in October.
Judge Swain has also mentioned that Costco was permanently prohibited from using “Tiffany” as a stand-alone term when selling its products.
Tiffany’s lawsuit that was flied back in 2013 on Valentine’s Day was the equivalent of sending Costco a black rose.
Tiffany sued after discovering that the salespeople at Costco were responding to customer inquiries by calling certain solitaire diamond rings “Tiffany” rings.
In addition to that, the salespeople “were not perturbed when customers who then realized that the rings were not actually manufactured by Tiffany expressed anger or upset,” Judge Swain wrote.
“Tiffany has never sold nor would it ever sell its fine jewelry through an off-price warehouse retailer like Costco,” the lawsuit said.
Costco said in a statement that it plans to appeal the ruling, which is described as “a product of multiple errors in pretrial, trial, and post-trial rulings.”
“This was not a case about counterfeiting in the common understanding of that word — Costco was not selling imitation Tiffany & Co. rings,” Costco said.
They emphasize that the rings were not marked with the Tiffany name, and were not sold using Tiffany’s trademark blue boxes.
Still, the judge wasn’t persuaded by the arguments.
“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,” Judge Swain wrote.
With the exception of Tiffany’s limited collaboration with Net-a-Porter, Tiffany jewelry is available only at Tiffany stores, a Tiffany spokesman said in an email.
“Judge Swain’s decision 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,” the company said in a statement.
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Featured image courtesy of Tiffany & Co.