On Valentine’s Day, Tiffany & Co. filed a lawsuit in federal court against Costco, claiming that Costco engaged in “trademark infringement, dilution, counterfeiting, unfair competition, injury to business reputation, false and deceptive business practices and false advertising.” Last November, Tiffany and Co. was first informed of the alleged infringement by one of Costco’s customers. This customer expressed disappointment that the elite jeweler would sell its jewelry at Costco. After some investigation, Tiffany’s learned that Costco salespersons had been referring to certain engagement rings as “Tiffany ring(s)” and that signs that used the word “Tiffany” as part of the ring description were on display in Costco stores.
Tiffany & Co. claims that there are now “hundreds if not thousands of people” who have purchased Costco rings out of confusion, thinking they instead were buying a ring made by Tiffany & Co. Linda Buckley, Vice President of Worldwide Public Relations at Tiffany’s was quoted saying that the Tiffany’s trademark is a “federally registered uncontestable trademark, has been continuously used for over 175 years, and enjoys worldwide fame and recognition as designating superior goods from Tiffany’s & Co.” Tiffany’s attests that Costco purposely left the “Tiffany” description of the engagement rings off of their website to help avoid detection. For this, Tiffany & Co. is demanding profits from Costco’s use of counterfeited trademarks, damages, and attorney’s fees.
In its Answer and Counterclaims to Tiffany & Co.’s complaint, Costco claims that the word “Tiffany” is a generic word used to describe a specific ring setting. To support this, Costco included dictionary definitions and advertisements in their exhibits. Further, Costco says that their rings were not sold in the iconic robin’s-egg blue Tiffany’s box and that there was no brand name on the rings sold. Therefore, Costco wants the claim dismissed and requests attorney’s fees, as well as “such other and further equitable relief as the Court may deem just and proper.”
Tiffany & Co.’s strongest argument may be that Costco’s use of Tiffany’s registered trademark “causes a likelihood of confusion” at the time of the sale under 15 U.S.C. § 1114. If the court finds that consumers view the mark as meaning that the ring has come from Tiffany’s, then Tiffany & Co. has a good argument that using the “Tiffany” in Costco’s ring descriptions causes consumer confusion. However, a well-known principle of trademark law is that once a brand name has become generic, such that the word becomes a synonym for the item, the brand name loses legal protection. This has happened to many brand names, including aspirin, zipper, and palates. If Costco can prove that the term “Tiffany” is now a generic term for a type of engagement ring, Tiffany & Co. may regret bringing the lawsuit, as it may cause other sellers to begin using the term “Tiffany” in their ring descriptions. For Tiffany & Co., a company that relies on brand name, the outcome of this lawsuit could have huge consequences.