Trademark Access Weighs in on Tiffany's Asserted Trademark Registration against Costco

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Tiffany recently filed a lawsuit against Costco in Federal Court for violating its Tiffany trademark registration, and the allegations are not pretty.

For the most part Costco has a pretty sterling reputation, but Tiffany is alleging that Costco’s business is not always so sparkling clean. Tiffany recently filed a lawsuit against Costco in Federal Court for violating its Tiffany trademark registration, and the allegations are not pretty.
Things came to light when a loyal Tiffany customer reported that Costco was advertising and selling diamond engagement rings, claiming they were genuine Tiffany jewelry. The Tiffany brand and trademark registration carry significant prestige and would likely spike demand for the rings, so it is not surprise to discover counterfeiters. But what is surprising, as noted by Tiffany’s trademark attorney, is that the counterfeiting is allegedly being done by a company like Costco.

The woman first noticed the rings at the Huntington Beach, California Costco in November of 2012. A follow up visit apparently revealed that the display case was labeled with the Tiffany trademark and the salesperson referred to the jewelry as Tiffany, when in fact it was not. If all the facts prove to be as reported, Costco could lose as much good will from the bad publicity as they do in adverse judgments and legal fees, although, the stakes are high in this case.

The complaint filed by Tiffany’s trademark attorneys demands that Costco forfeit all profits from ring sales, plus pay statutory damages amounting to as much as $2 million per infringement. Tiffany believes that hundreds and maybe even thousands of customers purchased the rings from Costco believing that they were genuine Tiffany rings. According to Perry Clegg, a trademark attorney at, while unusual, Tiffany may have a good case for willful infringement in this case if the facts turn out to be as alleged in the complaint, and that would significantly increase the damages that could be awarded in the case.

Luxury goods manufacturers like Tiffany or Rolex have to make great efforts to protect their trademark registrations and brand because there are so many counterfeiters out there. While imitation may be the highest form of flattery, it detracts from the legitimate business of these companies. The fake merchandise confuses customers and affects the market for the genuine merchandise, because the counterfeit market can reduce the demand for genuine goods and possibly lead to price erosion.

Of course, said Clegg, trademark infringement is often not willful or simply using an exact copy of another party’s trademark. Competitor may seek to benefit from the good will by using a mark that is not identical to another’s trademark registration, but is similar. According to Clegg, it is important to be aware of what others are doing in the marketplace and protect valuable investments in branding and trademark registrations. If customers believe their goods come from one source, but the goods are really from another source, a business can lose control of its reputation for quality or outstanding service pretty quickly. Clegg recommends you consult an experienced trademark attorney to make sure you are making the best use of your brand identity and to protect it from encroachment by competitors.

The case filed by Tiffany is titled Tiffany & Company and Tiffany (NJ) LLC v. Costco Wholesale Corp, U.S. District Court, Southern District of New York, 13-1041.

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Perry Clegg
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