Orange County - Tiffany & Co. filed a trademark infringement lawsuit against Costco Wholesale Corp. claiming that the discount retail giant sold unauthorized diamond engagement rings with the Tiffany brand name.
The high-end jewelry maker claimed that it discovered Costco was using the Tiffany name to market and sell diamond engagement rings at its various retail locations across the United States through an internal investigation.
"Costco was able to sell... engagement rings falsely identified as 'Tiffany,' and thereby unlawfully trade on Tiffany's goodwill and brand awareness to increase its own sales," the complaint said.
Tiffany claimed that Costco's use of the Tiffany brand name harmed the high-end jewelry retailer by associating its high-end name with a budget retail chain. Tiffany also claimed that Costco purposely attempted to evade detection of its infringement by only selling and marketing the unauthorized Tiffany-branded engagement rings in stores and not promoting the rings online.
"The only place the Tiffany trademarks were displayed were on point of sale signs within a glass case in the jewelry departments of Costco warehouse stores, making them visible only to Costco members shopping for engagement rings in particular stores where the rings were displayed," Tiffany said.
Tiffany claims that Costco's use of its trademark in conjunction with the engagement rings it sold mislead customers to believe they were buying genuine Tiffany rings and caused them to see Costco as a retailer of fine jewelry products.
"Since these rings themselves were not Tiffany, the counterfeits made other non-branded jewelry in the same display case appear more valuable by comparison since those other items were, in fact, no different than what was falsely labeled as Tiffany," Tiffany said.
Tiffany addressed the alleged infringement with Costco in December and Costco agreed to cease using the Tiffany name in all of its store locations. However, Tiffany is still seeking Costco's profits from selling the alleged counterfeit goods, treble damages, and an order requiring Costco to make a public statement regarding its misconduct and to notify all purchasers of the rings that they had not bought authentic Tiffany jewelry.
Tiffany is accusing Costco of trademark infringement, counterfeiting, dilution, and false advertising.