Lawyers for Tiffany said the company believed hundreds, if not thousands, of Costco members were misled and bought engagement rings they believed were authentic Tiffany products.
They claimed Costco falsely labelled its diamond rings as Tiffany rings, deceiving customers and damaging the Tiffany brand.
In November 2012, according to the lawsuit, a Costco shopper in California complained to Tiffany that she was disappointed to see Costco offering for sale what were promoted on in-store signs as Tiffany diamond engagement rings.
Investigations revealed that rings in a display case at the Huntington Beach Costco were labelled with the Tiffany brand and that a Costco salesperson had referred to them as Tiffany rings when they were not, according to the lawsuit.
Tiffany also claimed that Costco was not using the Tiffany trademarks online for the same products at the same time to avoid detection, according to the lawsuit.
"This is not the kind of behavior people expect from a company like Costco, and this case will shed a much needed light on this outrageous behaviour," said a lawyer for Tiffany, Jeffrey Mitchell.Mitchell said Tiffany maintained an "aggressive and rigorous intellectual property program, and regularly took actions against counterfeiters and infringers".
In the past, luxury retailers have sued successfully to stop sales of alleged imitation products they believe cut into their own revenue streams and customer goodwill.
The trademark lawsuit filed in Manhattan federal court also called on Costco to forfeit profits from the ring sales, plus damages of US$2 million per infringement.
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