tiffanyDamages are Forever: Tiffany & Co. Succeeds in Diamond Ring Trademark Infringement Case Against Costco

This notable trademark infringement case dates back to 2012 when a woman wearing a Tiffany & Co. engagement ring spotted what appeared to be her exact ring advertised as “Tiffany” in her local Costco Wholesale Corp. (“Defendant” or “Costco”) store. To the woman’s surprise, the “Tiffany” ring on display in Costco was being sold for several thousand dollars less than the ring she was wearing. Little did she know, the “Tiffany” ring on display in Costco was merely Costco’s version of a Tiffany ring. Tiffany & Co. (“Plaintiff” or “Tiffany”) soon learned of Costco’s in-store “Tiffany” advertisements and filed suit in February 2013.

Plaintiff brought suit against Costco sounding primarily in trademark infringement, counterfeiting, and unfair competition under New York law. Costco’s main defense to the trademark infringement claims was that the term “Tiffany” is a generic term used to describe a type of ring setting. Counsel for Tiffany rebuffed this defense, commenting that “[i]n a trademark case, it’s not what you intend when you use a word, it’s how . . . that word [is] perceived by the consumer.” Indeed, expert testimony offered by Tiffany showed that 9 of 10 people viewed “Tiffany” as a brand rather than a generic term used to describe a type of ring setting.

The Southern District of New York granted Plaintiff’s motion for summary judgment for infringement and counterfeiting in September 2015, rejecting Costco’s “generic term” defense. Ruling in favor of Plaintiff, the Court also allowed Plaintiff to pursue punitive damages against Costco because its conduct may have constituted “gross, wanton, or willful fraud.” Accordingly, the parties went to trial to determine damages in September 2016. The jury found Costco accountable for $5.5 million in compensatory damages for Costco’s infringement related profits dating back to 2007, $2 million in statutory damages, and a whopping $8.25 million in punitive damages for Costco’s use of Tiffany’s name in signs at end-of-aisle display cases. Attorneys for Tiffany observed that the jury used “common sense” when determining the damages in this case.

Manhattan commercial litigation attorney, Peter Moulinos, adds that this case is particularly noteworthy, as punitive damages are seldom considered by Courts, let alone granted. However, the punitive damages sought in this matter were appropriately pursued and attained considering the bad faith actions taken by Defendant and its lack of evidentiary support in its defense.

This blog post was written by Nicholas Moneta, a legal intern at Moulinos & Associates LLC and is not offered as legal advice. This case may be cited as: Tiffany & Co. v. Costco Wholesale Corp., No. 1:13-cv-01041 (S.D.N.Y. 2016).