Majors

Tiffany, Costco Settle Long-Standing Lawsuit

MajorsJul 21, 2021

Tiffany, Costco Settle Long-Standing Lawsuit

The contentious battle over the term “Tiffany Setting” has come to a close via a settlement.

Tiffany & Co. reached a settlement agreement with Costco following a years-long trademark infringement lawsuit. (Image courtesy of Tiffany & Co.)
New York—The contentious, 8-year-long legal battle between Tiffany & Co. and Costco Wholesale Corp. has come to an anticlimactic end. 

The companies have reached a settlement, the terms of which have not been disclosed, and the case has been dismissed with prejudice, meaning Tiffany cannot sue Costco again on the same grounds.

In a statement to National Jeweler, a lawyer representing Costco said the parties have “amicably resolved their dispute.” 

Tiffany declined to comment.

The saga began Valentine’s Day of 2013 when Tiffany took Costco to court, suing the big-box retailer in New York federal court for trademark infringement, counterfeiting and unfair business practices for selling “Tiffany” rings that were not made by Tiffany.

An estimated 3,349 customers bought “Tiffany” rings at Costco during the period covered by the lawsuit, according to court documents.

 Related stories will be right here … 

In a countersuit, Costco said the term “Tiffany” setting had become genericized and could be used by any company to mean a ring with multiple, slender prongs holding a single stone.

In 2015, a federal judge ruled in Tiffany’s favor and granted the jeweler’s motion for summary judgment (a judgment entered by the court without a full trial) in the case.

A jury ordered Costco to pay Tiffany $5.5 million for unlawful profits, including $3.7 million in direct profits and $1.8 million in additional benefits from the ring sales, and $8.25 million in punitive damages.

The judge trebled the $3.7 million to $11 million, for grand total of $21 million Costco was to pay Tiffany.

In August 2020, the Second Circuit Court of Appeals vacated the summary judgment on appeal from Costco.

A unanimous ruling found that if a jury had heard the case, jurors likely wouldn’t be confused by Costco’s use of the word “Tiffany” or believe the rings were made or endorsed by Tiffany & Co.

The appeals court sent the case back down to the district court to hash out the issues of punitive damages and a jury.

The case dragged on, with Costco filing a motion to prevent a jury trial and stop Tiffany from seeking punitive damages, which Tiffany disputed based on prior court rulings.

An in-person trial was possible for July, but a settlement remained on the table, as per court documents. The companies had discussed one prior to going to trial in 2016. 

Tiffany v. Costco was filed in the U.S. District Court for the Southern District of New York.

Lenore Fedowis the associate editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

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