The dispute, which dates back to 2013, centres on a collection of six-prong diamond engagement rings sold by Costco with the descriptor “Tiffany” on the tags and in-store signage.
An estimated 3,349 customers purchased the Costco rings, netting Costco $US3.7 million in profits. A 1-carat platinum solitaire ring with VS clarity was listed at $US6,399.99 – a similar ring on the Tiffany & Co. website retails for $US14,000.
Tiffany & Co. argues that the rings constituted trademark infringement and counterfeiting, as it was possible customers were misled to believe that the rings were manufactured by Tiffany & Co.
It also contends that Costco had instructed its jewellery suppliers to copy Tiffany & Co. engagement ring designs.
Meanwhile, Costco claims that the descriptor “Tiffany” refers to the six-prong setting of the rings and that “Tiffany setting” could be considered a generic term in the jewellery industry.
In August 2020, the US Court of Appeals for the Second Circuit upheld Costco’s appeal and referred the case back to the US District Court for the Southern District of New York, on the grounds that a jury trial should have taken place.
The judgment stated, “A jury could reasonably conclude that consumers of diamond engagement rings would know or learn that ‘Tiffany’ describes a style of setting not unique to rings manufactured by Tiffany, and [could] recognize [sic] that Costco used the term only in that descriptive sense.”
However, in a filing dated 12 February 2021, Costco filed a motion to prevent a jury trial and sought to block Tiffany & Co. from seeking punitive damages, claiming the jeweller must prove lost profits instead.
Tiffany & Co. – which was acquired by French luxury conglomerate Moët Hennessy Louis Vuitton in January – opposed the motion, arguing that the district court previously established that it is entitled to seek punitive damages under New York law; in a joint-status report filed on 12 March, Tiffany & Co. refused a virtual jury trial but agreed to an in-person trial in July.
According to media reports, an out-of-court settlement has been discussed.
More reading:
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