Tiffany Files Trademark Infringement Lawsuit against Costco

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(IDEX Online News) – In a battle of the brands, luxury jewelry company Tiffany & Co. has launched legal action against discount warehouse chain Costco to stop sales of alleged counterfeit diamond engagement rings. Tiffany said it is taking action to protect its customers and its brand.

Tiffany filed the lawsuit in the U.S. District Court for the Southern District of New York, alleging trademark infringement, dilution, counterfeiting, unfair competition, injury to business reputation, false and deceptive business practices and false advertising.

The action arose after a customer alerted Tiffany to the sale of what was promoted on in-store signs as “Tiffany” diamond engagement rings at a Costco store in Huntington Beach, California in November 2012.

Tiffany said it immediately launched an investigation, and later learned that for many years, and without its knowledge, Costco had apparently been selling different styles of rings that, according to the lawsuit, falsely identified on in-store signage as “Tiffany.”

The jeweler alleges that Costco led its members to believe they were purchasing authentic Tiffany products at significant discounts. “We now know that there are at least hundreds if not thousands of Costco members who think they bought a Tiffany engagement ring at Costco, which they didn’t. Costco knew what it was doing when it used the Tiffany trademark to sell rings that had nothing to do with Tiffany. This is not the kind of behavior people expect from a company like Costco,” said Jeffrey Mitchell of Dickstein Shapiro, Tiffany’s counsel in the case.

“The Tiffany brand has been damaged, Costco members have been damaged, and Costco has profited from the sale of engagement rings by misrepresenting what they were. We will get to the bottom of what Costco was up to and why and right a terrible wrong,” Mitchell added.

Mitchell said that the case differs from other cases of counterfeiting in that customers expect authentic brand name merchandise at discount prices at Costco. “Everyone knows that buying something on a street corner or over the Internet from an unknown source is risky. Until now, no one would have thought it could be risky to buy brand name merchandise from Costco as well.”

To protect its brand, Tiffany sells its fine jewelry only in Tiffany stores. It is not distributed or sold at discount through other wholesale or retail establishments.

Tiffany says it has never sold and nor would it ever sell its fine jewelry through an off-price warehouse retailer such as Costco.