Costco’s ‘Tiffany’ rings not real thing

Judge orders $19.4M payment in trademark infringement case

NEW YORK — Tiffany has beaten Costco to the tune of at least $19.4 million in the trademark infringement battle over alleged knock-off rings that pitted the luxury jeweller against the membership warehouse giant.

Costco must pay the financial damages for its years-long practice of selling rings with signs that said “Tiffany” without any modifiers to indicate the items were not made by the world-famed New York City jewelry company, a judge ruled Monday.

In all, Costco owes Tiffany $11.1 million, three times the estimated profit the company made on sales of the rings, U.S. District Court Judge Laura Taylor Swain wrote in a 17page decision. She also ordered Costco to pay $8.25 million (all figures US) in legal damages and issued a permanent injunction that bars the company from using the Tiffany name without clarifying modifiers.

Swain’s decision evoked the scene of Costco members somehow discovering Tiffany rings at improbably low discount prices in Costco’s cavernous warehouse centres.

“Costco’s salespeople described such rings as “Tiffany” rings in response to customer inquiries, and were not perturbed when customers who then realized that the rings were not actually manufactured by Tiffany expressed anger or upset,” wrote Swain.

“Costco’s upper management ... displayed at best a cavalier attitude toward Costco’s use of the Tiffany name in conjunction with ring sales and marketing,” the judge added.

Although the legal battle focused on a few thousand rings, Tiffany contended the case was important to protect its famed corporate identity.

Costco vowed to appeal, contending that the decision was “a product of multiple errors” by the judge.

“The diamond ring in question had a pronged setting style that is commonly known as a ‘Tiffany’ setting,” Costco said. “Costco intended that the word Tiffany in its signs convey only that the rings had this style of setting — not that the rings were Tiffany & Co. brand rings.”

The judge called it intentional.