The Tiffany v. Costco Trademark Dispute Finally Settles

In July, Tiffany & Co. and Costco Wholesale settled an almost decade-long legal battle over the “Tiffany” trademark. The two companies had battled over claims of trademark infringement, trademark genericism, and counterfeit sales for years.

Tiffany v. Costco Trademark Dispute 

The lawsuit first came about when Tiffany & Co. found that Costco was selling rings under the Tiffany name. In response, Costco claimed that “Tiffany” had become a generic term and claimed it actually referred to the prong-setting of the rings.

When a defendant in a trademark infringement case claims genericism as a default, they are arguing that the term be invalidated as a federal trademark.  In this case, it would allow any retailer to use the term “Tiffany” in connection with rings.  For Tiffany & Co., this would mean the invalidation of a 184-year-old trademark and all the goodwill that has come to be associated with the brand.

The Road to Settlement of the Tiffany v. Costco Trademark Infringement Dispute

At the trial court level, a federal judge ruled in Tiffany’s favor in 2015, granting Tiffany’s motion for summary judgment and awarding $21 million to the jewelry company.  However, on appeal, the Second Circuit Court of Appeals vacated the summary judgment.  It instead found that Costco had acted in good faith and that Costco customers would not have been confused by the “Tiffany” rings sold at Costco.  According to court papers, only 3,349 consumers bought Tiffany rings at Costco during the time of dispute. 

After replacing the law firm that represented them, Tiffany & Co. settled with Costco for an undisclosed amount, most likely spurred on by the Second Circuit Court of Appeals’ decision and unwilling to risk such a valuable trademark.

Key Takeaways on the Tiffany v. Costco Trademark Dispute

Tiffany & Co. and Costco Wholesale settled an almost decades-long trademark dispute where:

• Costco used the affirmative defense claim that the “Tiffany” name is generic;

• Tiffany & Co. had won at the trial court level on summary judgment; and

• The Second Circuit Court of Appeals ruled that consumers would not have been confused by the Tiffany rings sold at Costco.

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