Market Minute: Tiffany Sues Costco Over Sales Of Engagement Rings

By Bernard Vaughan and Jonathan Stempel

Feb 14 (Reuters) - Tiffany & Co (TIF) sued Costco Wholesale Corp (COST) on Thursday to stop the largest U.S. warehouse club chain from selling what it called counterfeit diamond engagement rings bearing the luxury retailer's name.

The trademark lawsuit filed in Manhattan federal court also calls on Costco to forfeit profits from the ring sales, plus damages of $2 million per infringement.

Tiffany said it believes hundreds, if not thousands, of Costco members bought engagement rings they believed were authentic Tiffany products but in fact were not.

Luxury retailers often sue to stop sales of alleged imitation products they believe cut into their own revenue streams and customer goodwill.

CostCo "This is not the kind of behavior people expect from a company like Costco, and this case will shed a much needed light on this outrageous behavior," said Jeffrey Mitchell, a lawyer for Tiffany.

Mitchell also noted in the statement that Tiffany maintains an "aggressive and rigorous intellectual property program, and regularly takes actions against counterfeiters and infringers."

A spokesman for Costco was not immediately available.

In November 2012, a person who was shopping at a Costco in Huntington Beach, Calif., complained to Tiffany that she was disappointed to see Costco offering for sale what were promoted on in-store signs as Tiffany diamond engagement rings, according to the lawsuit.

A subsequent investigation revealed rings in a display case at the Huntington Beach Costco labeled with the Tiffany brand and that a salesperson there referred to them as Tiffany rings when they were not, according to the lawsuit. Tiffany also discovered that Costco was not using the Tiffany trademarks online for the same products at the same time to avoid detection, according to the lawsuit.

The case is Tiffany & Company and Tiffany (NJ) LLC v. Costco Wholesale Corp, U.S. District Court, Southern District of New York, 13-1041.


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38 Comments

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Hello, Karen

Why would ANYONE believe that the item they might buy WAS in fact a Tiffany product? Or in other words, if you shop at Costco for jewelry, you ABSOLUTELY, CANNOT AFFORD Tiffany?

Tiffany sounds like they are as greedy as the rest!

February 18 2013 at 3:08 PM Report abuse rate up rate down Reply
suealiaim

maybe costco saw tiffany as a style rather than a brand...you know like when manufacturers sell "flavored" items...like butter flavor popcorn..no butter; strawberry flavor fruit rollups..no strawberries; vanilla flavored coffee..no vanilla.

February 18 2013 at 1:12 PM Report abuse rate up rate down Reply
jsimancas

well, you can sue the chinese , because thier products are not good

February 18 2013 at 11:06 AM Report abuse rate up rate down Reply
jsimancas

if you not buying an item you can not sue the seller . Tifany is out of line the sue can not proceed

February 18 2013 at 10:53 AM Report abuse rate up rate down Reply
1 reply to jsimancas's comment
Roni

They do not have to purchase anything in order to proceed with a case. The evidence is them having items in a showcase stating that the item is Tiffany & Co and customers contacting them after making purchases that were sold as their product. I bet Cosco didn't do everything they were suppose to do to make sure that the product is legit.

February 18 2013 at 12:29 PM Report abuse rate up rate down Reply
kittenblu

As well Costco should burn.

February 18 2013 at 9:52 AM Report abuse rate up rate down Reply
Imofanopinion

Type your comment heFrom Wikipedia bet the person did not look at the complete sign - she was too bent out of shape thinking someone got a better deal then her. I have seen many jewelry stores use the ad for a tiffany mounted engagement set

A Tiffany mount or Tiffany setting is a set of prongs (called a claw, crown, or coronet) that hold a gemstone and attach it to a plain band ring. It is a common setting for a diamond solitaire engagement ring. It is named after Tiffany & Co., which popularized it.
It is inexpensive and easy to re-use, so most jewelers will accept returns of this setting and re-set the diamond in a different ring more to the bride-to-be's liking. (This is most often done just before getting married, to move the diamond into a wedding set of wedding band and engagement ring that are matched and often locked together.)
The Tiffany mount can also show off the diamond and may maximize its radiance. Quality settings do not snag on clothing, as the prongs are firmly attached to the diamond and well finished.
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February 18 2013 at 4:19 AM Report abuse rate up rate down Reply
Imofanopinion

From Wikipedia bet the person did not look at the complete sign - she was too bent out of shape thinking someone got a better deal then her. I have seen many jewelry stores use the ad for a tiffany mounted engagement set

A Tiffany mount or Tiffany setting is a set of prongs (called a claw, crown, or coronet) that hold a gemstone and attach it to a plain band ring. It is a common setting for a diamond solitaire engagement ring. It is named after Tiffany & Co., which popularized it.
It is inexpensive and easy to re-use, so most jewelers will accept returns of this setting and re-set the diamond in a different ring more to the bride-to-be's liking. (This is most often done just before getting married, to move the diamond into a wedding set of wedding band and engagement ring that are matched and often locked together.)
The Tiffany mount can also show off the diamond and may maximize its radiance. Quality settings do not snag on clothing, as the prongs are firmly attached to the diamond and well finished.

February 18 2013 at 4:18 AM Report abuse rate up rate down Reply
chuckhalper

The term “Tiffany setting” has virtually reached ‘Kleenex status’—it’s now used generally throughout the jewelry business to describe any multi-pronged solitaire setting, be it of Tiffany manufacture or not. A Tiffany mount which the Costco rings featured, does not mean they were sourced from Tiffany. My guess is that will be the crux of the argument.

February 17 2013 at 6:46 PM Report abuse +1 rate up rate down Reply
foosielucy

TWO COMMENTS IF I MAY:
1. THERE ARE DIAMOND RINGS OF ALL QUALITIES THAT HAVE WHAT IS KNOWN IN THE TRADE AS 'THE TIFFANY SETTING' AND EVERYONE USES THAT
2. THE HORRORS PERPETRATED BY THE BIG DIAMOND SELLERS ON THOSE WHO DIG FOR DIAMONDS SHOULD HAVE INTELLIGENT AND CARING ENGAGED COUPLES LOOKING FOR OTHER KINDS OF STONES - BUT LEMMINGS WE ARE AND LEMMINGS WE WILL BE I GUESS.

February 17 2013 at 3:55 PM Report abuse +1 rate up rate down Reply
S321Saint

not sure what the big problem is. Diamond is a diamon...whether Tiffiny or Costco. I do understand using the name. But please....trying to say that a Tiffany diamond is better than another diamond is foolish.

February 17 2013 at 8:34 AM Report abuse rate up rate down Reply
1 reply to S321Saint's comment
wmichalek

No, but a copywrited trade name may not be used without permission. Costco knew they were in the wrong by not posting the offerings on-line, which would have brought them to immediate attention of Tiffany. Most large companies with copywrited trade names have peole who have the job to check for counterfeit merchandise on-line every day.

February 17 2013 at 10:02 AM Report abuse rate up rate down Reply