2. 1
2
3
Valentine’s Day 2013
Mid-February 2013
Later that month:
Events involved in
Fashion law case study - Tiffany
and co vs Costco
The jewelry company Tiffany had recently
learned that Costco Wholesale was selling
diamond “Tiffany” rings at its store in
Huntington Beach, California.
Tiffany had completed an investigation and
filed a lawsuit in a New York federal court.
Tiffany accused Costco of trademark
infringement, counterfeiting, and unfair
business practices.
Costco lodged a counterclaim of its own.
Costco argued that “Tiffany” is not a
legally-protected trademark but instead, a
generic term short for “Tiffany setting,”
which describes a specific ring setting (i.e.,
a diamond solitaire situated among six
prongs).
3. 4
5
In September 2015
On September 29,
2016
Events involved in
Fashion law case study - Tiffany
and co vs Costco
Tiffany’s filed a motion for summary judgment
and it was granted. The court found that
Costco was liable on a whole host of grounds,
including trademark infringement and
counterfeiting. A civil jury would determine the
amount of monetary damages owed to Tiffany.
A jury of New Yorker residents returned a verdict
awarding $5.5 million in damages to Tiffany to
compensate for the profits that Costco had made
from selling the rings dating back to 2007. That
figure was increased a month later when $8.25
million in punitive damages were added on top
of the sum of the actual damages in order to
punish Costco for its willful bad acts. So the total
damages bill for Costco was nearly $14 million
subject to the judge’s post-verdict approval.
4. 6
7
August 2017
September 2017
Events involved in
Fashion law case study - Tiffany
and co vs Costco
Judge Swain did not sign off on that figure; she
increased it. She ordered Costco to pay $19
million in damages, a sum of three times the $3.7
million in profits that the retailer was found to
have made from selling the infringing rings ($11.1
million) plus an additional $8.25 million in punitive
damages.
Costco was unsatisfied with the outcome at the
district court level, Costco filed an appeal with
the U.S. Court of Appeals for the Second Circuit
in September 2017. It argued that its rings did
not meet the higher bar required for a finding of
counterfeiting, as opposed to trademark
infringement (that comes with lesser penalties),
and thus, it argued, the court’s decision should
be reversed.
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9
July 2019
As of 2020
Events involved in
Fashion law case study - Tiffany
and co vs Costco
In response to Costco’s appeal, Tiffany filed a
brief in July 2019 that the lower court’s grant of
summary judgment on the issues of trademark
infringement and counterfeiting liability should
stand because Costco intentionally used Tiffany’s
famous name to sell inferior copies of an
engagement ring for which Tiffany is renowned.
Costco’s lodging of an appeal did not make much
of a difference. Judge Swain increased the
amount Costco needed to pay, this time by $5.9
million to cover Tiffany’s legal costs, bringing
Costco’s total owed to a whopping $25.25 million.
The case is expected to be decided by the 3-judge
panel for the Second Circuit.
