This dispute dates back to 2012, when a customer reported to Tiffany that she saw rings for sale that were branded “Tiffany,” but weren’t actually made or officially licensed by the company Tiffany. Costco countered that “Tiffany” is a generic name for a type of diamond ring setting, but at the same time was trying to present a more upscale warehouse club jewelry experience, with fancy packaging and designs that Tiffany claimed mimicked theirs.
Since Costco does sell name-brand merchandise at a discount, it’s easy to see how customers could assume they were just getting a great deal on an actual ring from Tiffany, not a generic ring with a Tiffany-style setting. One couple testified that they were devastated to learn that their engagement ring wasn’t a genuine Tiffany piece, which they only discovered when the ring’s stone fell out.
“The Court therefore finds that no reasonable finder of fact could reach the conclusion that Costco acted in good faith when it used the Tiffany mark in its display case signs,” wrote the judge, finding in favor of Tiffany. The case now goes to a jury to determine the damages that Costco should pay, based on the damage to their brand and Costco’s actual sales of the Tiffany rings.
Before this ruling, the companies agreed that Costco would remove any signage implying that the rings came from Tiffany, and the company also sent a letter to known purchasers of the rings, letting them know that they could return the jewelry for a refund if they were unhappy with it or felt that they had been misled.