Selling 'Tiffany' Engagement Rings Just Cost Costco $19.4M

Judge rules against warehouse club, which sold jewelry using Tiffany brand name
By Jenn Gidman,  Newser Staff
Posted Aug 15, 2017 10:00 AM CDT
Judge to Costco: Pay Tiffany $19.4M for Phony Rings
A judge wasn't buying Costco's defense.   (AP Photo/Gene J. Puskar)

A federal judge's decision on trademark infringement likely has Costco executives feeling blue—but definitely not Tiffany blue. Per CNBC, US District Judge Laura Taylor Swain ruled Monday the warehouse club must fork over $19.4 million in damages, plus interest, to the luxury jeweler for selling diamond engagement rings that customers might incorrectly think were made by Tiffany. The judgment represents three times the profit of $3.7 million Tiffany is said to have lost to Costco over the 2,500 or so rings sold through the warehouse club, plus $8.25 million in punitive damages awarded by a jury last year. Swain also barred Costco from selling any item with the name "Tiffany" on it, unless it's qualified by words such as "setting," "style," or "set" to make it clear it's not an official Tiffany product.

The suit comes as Tiffany is trying to regain customers who've started going elsewhere for their gems. Per the complaint cited in the Washington Post, Costco sold the rings next to signs that "promoted [them] … as Tiffany diamond engagement rings," and a salesperson used the term "Tiffany ring" to refer to several different rings. But Costco argued the word "Tiffany" has entered the generic realm as a way of describing a certain ring style, the rings were stamped with the name of the actual manufacturer, and, per the Street, the rings were sold in brown boxes, not in Tiffany's trademark blue packaging. However, Swain said Costco management "displayed at best a cavalier attitude" in using the Tiffany name to sell their wares and that its defense was "not credible." (Tiffany originally wanted billions of dollars in this case.)

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