Costco Must Pay Tiffany $19.4 Million for Selling 'Tiffany' Rings

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$19.4 million after the budget retailer sold counterfeit diamond engagement rings using the Tiffany name.

The jury found that Costco had earned almost $3.7 million in profits from the sale of about 2,500 rings by "using display case signage that included the "Tiffany" mark as a standalone term".

Tiffany said in a statement that the decision "validates the strength of the Tiffany trademark and the value of our brand, and most importantly, sends a clear and powerful message to Costco and others who infringe the Tiffany mark".

Wholesaler Costco has been told it must pay an initial sum of $8.2 million to jewellery company Tiffany for unlawfully using its trademark on rings. Costco also said the rings were not stamped with the Tiffany & Co name and were sold in plain beige and brown wooden boxes rather than the famous blue Tiffany boxes.

Costco attempted to appeal this ruling prior to trial; Tiffany & Co. opposed the appeal, and the appellate court declined to exercise jurisdiction at that time.

The diamond ring in question had a pronged setting style that is commonly known as a "Tiffany" setting.

According to the complaint, Tiffany became aware of the issues after a customer shopping at a California Costco saw that the store was selling what it advertised as "Tiffany" diamond engagement rings ranging in price from $3,199.99 to $6,399.99.

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"We brought this case...to ensure that Costco's customers were not misled about their purchases", he said. "Costco intended that the word Tiffany in its signs convey only that the rings had this style of setting - not that the rings were Tiffany & Co brand rings", Costco said.

"Signs that said Tiffany setting or Tiffany set or Tiffany were in use at Costco for many years", it said.

Costco, which had sold 2,500 of them, put them on display with the label "Tiffany", although they were not in fact made by the jeweller.

Tiffany had sued Costco on Valentine's Day in 2013.

Costco's upper management "displayed at best a cavalier attitude toward Costco's use of the Tiffany name in conjunction with ring sales and marketing", Swain wrote, according to the Reuters report. "From a purchaser list of approximately 2,500, Tiffany identified fewer than 10 who said they had misunderstood Costco's signage".

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. Most of the signs about which Tiffany & Co. initially complained (but later abandoned) contained these phrases. Tiffany & Co stock traded up 1.7% premarket.

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