September 19, 2017
Authored by: BCLP, Merrit Jones, Alex Whitworth and Nancy Franco
A federal district court has ordered Costco to pay Tiffany at least $19.4 million in a trademark infringement battle based on generic diamond engagement rings bearing the “Tiffany” name.
Judge Laura Taylor Swain in the Southern District of New York ruled that Tiffany is entitled to $11.1 million as profits for trademark infringement, plus interest, representing triple its lost profits, plus $8.25 million in punitive damages awarded by a jury last October. Judge Swain also permanently barred Costco from using “Tiffany” as a stand-alone term, without modifiers such as “setting,” “set” or “style.” Tiffany did not assert any infringement claims based on Costco’s use of the terms “Tiffany style” and “Tiffany setting,” leaving open the question of whether these modifiers could provide a fair use defense. Costco has appealed the ruling.
In an unsuccessful bid to dismiss the case before trial, Costco had argued that “Tiffany” has become a generic term, and that “[t]he diamond ring in question had a pronged setting style that is commonly known as a ‘Tiffany’ setting.” Costco further argued that it intended that the word Tiffany in its signs “convey only that the rings had this style of setting — not that the rings were Tiffany & Co. brand rings.” As evidence, it pointed out that the rings were not sold using Tiffany’s trademark blue boxes.
Judge Swain was not swayed by these arguments. She ruled that Costco’s evidence in the case was “not credible” and “insufficient” to establish that the company’s use of the Tiffany