Published 07/16/2021 by CIONCA IP TEAM (SE)
Tiffany & Co. v. Costco Wholesale Corp is a unique trademark infringement case with two surprising verdicts in a New York district court and the Second Circuit court of appeals. Let’s discuss this fascinating legal battle and explain the implications on trademark and counterfeit law. Here’s the case background and legal arguments that make this case unique.
Tiffany & Co. is a famous luxury jewelry company that specializes in silver and diamond products. The legal team that represents Tiffany’s felt that popular wholesale retailer Costco was infringing on the jewelry company’s trademark by posting point-of-sale signs.
Costco’s jewelry point-of-sale signs contained the word “Tiffany,” while promoting diamond rings, which Tiffany & Co. argued in district court was an act of infringement on their brand. Similarly, Tiffany & Co. convinced the courts that using a point-of-sale sign containing Tiffany’s trademarked name in connection with diamond rings for sale was also a form of counterfeiting.
As a result, Tiffany & Co. was granted over $21 million, which covered sales from Costco’s “Tiffany” diamond rings. However, matters became more complex when this case went to the court of appeals. Instead of agreeing with the validity of Tiffany’s award, the court decided that the district court’s decision was inappropriate, without hearing more about Costco’s question of whether they could in fact infringe and counterfeit goods that they believed were not likely to confuse with consumers.
While Costco was aware of Tiffany’s trademark for the name, company attorneys believed that the use of the word “Tiffany” in their point-of-sale signs was not done in a way that would infringe on the jewelry company. Instead, Costco argued one central point: the word “Tiffany” in the marketing material was not alluding to the famous jewelry brand. Instead, Tiffany referred to a diamond ring style, which is recognized by both consumers and sellers of diamond products.
Although Costco’s attorneys were unable to convince the district court that their use of the word “Tiffany” was fair because of the Lanham Act, they successfully argued their point in the court of appeals. During this time, they were able to convince the court that as the word Tiffany is widely known by those who are familiar with diamond ring cuts, there is no way that a consumer could confuse Costco’s offerings with Tiffany’s. The court agreed with Costco and undid the first ruling that Costco had to pay Tiffany & Co. $21 million, a massive win for the popular retailer.
In conclusion, this court case is fascinating because it covers one company trying to protect their copyright by filing a lawsuit against a company that was not infringing on its brand. Although the word Tiffany appeared in the marketing material, it referred to what typical consumers would understand as a specific diamond and ring set. This judgment will likely influence other brand owners and prevent them from bringing lawsuits against other companies or individuals that use trademarked words in a way that is fair use.
Disclaimer: The views and opinions expressed throughout this blog are the views and opinions of the individual author(s) and/or contributor(s) and do not necessarily reflect the views and opinions of our firm, CIONCA IP Law. P.C.
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