Costco sold a collection of engagement rings that were marketed as being from "Tiffany"

By Chris Harris
August 15, 2017 04:07 PM

On Monday, a federal judge ruled that Costco must pay approximately $19.4 million in damages to Tiffany & Co. in a trademark infringement lawsuit, for selling a collection of engagement rings that were described as being from “Tiffany” — as in made by the famous New York City-based jeweler, though they were not.

According to U.S. District Judge Laura Taylor Swain’s decision, Costco employees referred to the rings as “Tiffany” rings and were unfazed when angered customers tried returning them.

The payout Costco owes Tiffany reportedly includes $8.25 million in legal damages and $11.1 million in profits, plus interest.

Tiffany first filed suit against the big-box retailer in 2013. The jewelry company accused Costco of misleading its customers, who thought they were purchasing a Tiffany ring.

In a statement late Monday, Costco called the decision “a product of multiple errors in pretrial, trial, and post-trial rulings.” The company said it plans to appeal.

At trial, Costco argued that “Tiffany” is a common phrase used to describe a style of ring setting and maintained the term “Tiffany” is used throughout the industry for rings that are not made by the high-end jewelry retailer.

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Costco’s statement notes the rings it sold were not marked with the Tiffany & Co. logo and were not sold in blue boxes or bags.

“This was not a case about counterfeiting in the common understanding of that word,” the company said. “Costco was not selling imitation Tiffany & Co. rings.”

Nathan Strauss, Tiffany & Co.’s director of corporate communications, issued a response, saying they “brought this case because we felt a responsibility to protect the value of our customers’ purchases and to ensure that Costco‘’s customers were not mislead about their purchases.”

The ruling also bars Costco from distributing any product not made by Tiffany as a “Tiffany” item without using words like a Tiffany “set,” “style” or “setting.”