Federal Court Issues $5.5 Million Compensation Order to Costco for Selling Imitation Tiffany Jewelry
In a significant legal battle that spanned over eight years, luxury jeweler Tiffany & Co. took Costco Wholesale Corp to court, alleging trademark infringement. The case, heard in the U.S. District Court for the Southern District of New York (No. 13-1041), came to a close with a settlement, demonstrating that Costco was not successful in its alleged trademark infringement from a legal standpoint.
The dispute began in 2012 when a customer informed Tiffany about "Tiffany" branded engagement rings being sold at Costco that were not, in fact, from Tiffany & Co. Costco defended itself by claiming that using the word "Tiffany" is a generic name for a type of diamond ring setting. However, the court disagreed, ruling in September 2015 that Costco was liable for willfully infringing Tiffany trademarks.
The jury ordered Costco to pay Tiffany $5.5 million in damages for selling about 2,500 diamond engagement rings with the Tiffany brand name. This award included $3.7 million as Costco's profits from the counterfeit sales and $1.8 million to account for the benefits Costco derived from the sales. The jury has yet to decide on punitive damages.
The trademark infringement law states that it's illegal if a significant portion of buyers think they are buying an original luxury item and not a discount imitation. In this case, a study found that nine out of ten consumers view Tiffany as a brand identifier rather than a generic term, supporting Tiffany's claim.
Meanwhile, in a separate legal battle, Russia's state-owned company, Sojuzplodoimport, has won a legal battle to reclaim the Stoli and Stolichnaya trademarks in Belgium, the Netherlands, and Luxembourg from the opposing party, the SPI Group.
Interestingly, the U.S. Court of Appeals for the Federal Circuit has allowed the registration of the trademark FUCT for a clothing brand, as the court agreed that "the mark comprises immoral or scandalous matter," since it is pronounced the same as the past tense of the vulgar verb "fuck."
In conclusion, the Tiffany vs. Costco case serves as a reminder of the importance of respecting trademark rights. Despite Costco's arguments, the court ruled in favour of Tiffany, underscoring the significance of brand identifiers in consumer perception. The resolution of the dispute was through a settlement, not a Costco victory asserting a right to infringe.
The Tiffany vs. Costco case, a residents of general-news interest, involves a significant dispute over trademark infringement in the business realm. Despite Costco's defense that "Tiffany" is a generic name for a diamond ring setting, the court ruled against Costco, ordering them to pay damages and acknowledging the importance of brand identifiers in the finance sector. In contrast, Russia's state-owned company, Sojuzplodoimport, recently won a legal battle to reclaim the Stoli and Stolichnaya trademarks, signifying the importance of protecting brands in the international crime-and-justice arena.
