Judge makes Costco notify buyers of counterfeit “Tiffany” rings

Tiffany & Co went head to head with Costco

In February 2013, Tiffany & Co. filed a lawsuit against Costco for selling “Tiffany” engagement rings. Costco defended their actions by stating that “Tiffany” was a generic diamond setting, not a brand. However, customers that shopped with Costco were not necessarily aware of what they were buying.

The basis of the lawsuit was a trademark infringement issue. Costco argued that the Tiffany & Co. trademark was invalid because it prevented anyone from describing the ring setting. However, U.S. District Judge Laura Taylor Swain did not agree. In her recent ruling, Swain stated that the evidence showed that Costco had “willingly infringed” the trademarked name, and by doing so, they confused consumers.

The case isn’t over quite yet

However, the case is not yet concluded. The next hearing is set for October 30. Between now and then, Swain has directed Tiffany & Co. and Costco to settle the outstanding issues. Tiffany & Co. has the option of seeking damages and recovering any profits that Costco made from the sale of these rings. If the two businesses cannot come to an agreement, Tiffany & Co. can request a jury to make the decision.

The lawsuit protects the Tiffany & Co. trademark and brand. Costco has sent letters to all customers who purchased the counterfeit rings offering a refund if they were unsatisfied. They have also agreed to remove all references to Tiffany from their display cases.

Tiffany & Co. isn’t the first to do this

Tiffany & Co. is not the first organization to file a lawsuit to protect their brand image. In October, 2014 Hershey Co. won their trademark infringement case against a Colorado based company to court over its pot-infused edibles that resembled Hershey treats.

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A trademark has to be protected, so that you don’t lose control of its identity. It’s almost a paradox. The more popular a brand gets, the more recognized it is. Tiffany & Co. had to keep its image strong.

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