If you ever been in a Costco before, you may have noticed the fine jewelry display that’s strategically placed at the front of the store.
According to ABC News, in 2015, luxury jewelers Tiffany & Co. served Costco Wholesale with a lawsuit for knowingly selling fake versions of their iconic (and trademarked) “Tiffany” diamond solitaire engagement ring.Image Credit: Screenshot/Tiffany & Co.
At the beginning of the legal battle, Tiffany & Co. lawyer Jeffrey Mitchell told ABC News that the company was originally tipped off by a Tiffany’s customer who filed a complaint after being “offended” that they would sell their engagement rings at a discount in Costco.
Mitchell also asserted that Costco had been selling the rings for years, saying that “hundreds, maybe thousands of engagement rings were sold using the Tiffany trademark.”
It has since been established, according to Fortune, that Costco sold about 2,500 engagement rings that infringed on the trademark.Image Credit: Screenshot/YouTube
In court proceedings that began on September 20th, Fortune reports that Costco argued using a common name like “Tiffany” did not infringe on Tiffany’s trademark of their ring.
While it’s true that you cannot trademark common names, it is possible to trademark a common word or name if you can prove the word has taken on a distinctive, secondary meaning. In this case, the secondary meaning would be associated with engagement rings, specifically brilliant diamond solitaires.
U.S. District Judge Laura Taylor Swain sided with Tiffany & Co. in the case, agreeing that Costco naming an engagement ring “Tiffany” did cause brand confusion.
What may have been the true nail in the coffin for Costco, however, was the piece of evidence Swain cited regarding the rings design— Costco employees intentionally asked jewelry designers to copy the look of the Tiffany & Co.’s “Tiffany” engagement ring.
Costco asserted that the total sales from the rings sold was only $781,000. On Friday, a federal jury ruled Costco should pay $5.5 million to Tiffany’s.
That’s gotta hurt.