According to multiple media reports, Costco has been ordered to pay the jewellery company US$13.75 million (AU$18.1m) after it was found guilty of using the term “Tiffany” to sell engagement rings.
On 29 September, a Southern District of New York court jury ruled that Costco must pay Tiffany & Co US$5.5 million (AU$7.2 m). The figure is said to relate to the profits Costco made selling engagement rings marked ‘Tiffany’.
In the second part of a two-phase damages trial on 5 October, jurors found that Tiffany & Co was entitled to an additional US$8.25 million (AU$10.9 m) in punitive damages.
The decision comes after the court ruled in favour of the jewellery company in September 2015, rejecting the notion that the term ‘Tiffany’ had become generic.
A long battle
Tiffany & Co initially filed suit against the warehouse retail giant in February 2013, claiming it was falsely selling Tiffany-branded diamond engagement rings in its stores.
Costco responded with a counterclaim stating it was not implying the selling of genuine Tiffany & Co rings but rather using the generic industry term ‘Tiffany setting’ in its labelling.
The jewellery company returned to court in April 2013 to have the counterclaim dismissed, arguing that Costco never used the word ‘setting’ in its labelling or advertising.
The dispute continued when in January 2014, the court allowed the case to proceed, stating there was a “genuine factual dispute” over the use of ‘Tiffany’ as a generic term for a pronged ring.
While a spokesperson for Tiffany & Co told Jeweller they could not share specific details of the case, they did provide the following statement from the company’s senior vice president and general counsel Leigh Harlan: “The award validates the strength of the Tiffany trademark, the value of our brand, and most importantly, sends a clear and powerful message to Costco and others who infringe the Tiffany mark.
“We felt a responsibility to protect the value of our customers’ purchases and to ensure that Costco‘s customers were not mislead about their purchases. It is critically important that the Tiffany name not be used to sell any engagement ring that is not its own.”
Costco posted a statement responding to the latest verdict on its website that signalled the legal battle might not be over.
It read: “Because the jury's verdicts will be subject to further consideration by the court, further comment is not appropriate at this time.”
The Costco statement made no mention of the amount of money it was ordered to pay Tiffany & Co.
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