By Michelle Graff
New York--Tiffany & Co. notched a huge legal victory this week, with a federal judge granting its motion for summary judgement in its lawsuit against Costco and rejecting arguments that the term “Tiffany” has become generic.

U.S. District Judge Laura Taylor Swain granted Tiffany’s motions for summary judgement on claims of trademark infringement and trademark counterfeiting on Tuesday while dismissing Costco’s counterclaim that the “Tiffany” mark has become generic.

Tiffany filed a lawsuit against Costco nearly three years ago, accusing the Issaquah, Wash.-based retailer of confusing consumers by selling rings in its stores with signs identifying them as “Tiffany” even though they aren’t genuine Tiffany & Co. rings.

Costco fired back with a counterclaim alleging that “Tiffany setting” had been in use so long that it had become a generic term that could be used to describe any setting comprised of multiple slender prongs extending upward from a base to hold a single gemstone. Costco asked the court to declare invalid Tiffany’s federal trademark registrations that prevent other retailers from using the term “Tiffany setting.”

While the court agreed to hear arguments about the term “Tiffany” being generic in terms of ring settings, it ultimately found that Tiffany has “proffered uncontroverted evidence demonstrating the strength of its mark,” Tuesday’s ruling states.

The judge writes in her decision that the most significant evidence is a report by Bain & Co. that states that Tiffany “claims the largest share of the female mind in the U.S.” when it comes to name recognition in jewelry brands.

While Costco argued that “the plain word Tiffany … is ‘weak’ in many ways,” it didn’t gather any reliable evidence to back up its assertion, court papers state.

The ruling also notes that Tiffany interviewed six different consumers who had purchased rings labeled as Tiffany at Costco and found that they all thought they had a genuine Tiffany & Co. ring. One woman even cried when the diamond fell out of what she believed was a Tiffany ring, court papers state.

A jury will determine punitive damages in the case at a later date.

Costco did not respond to request for comment on the ruling by deadline.

Tiffany filed suit against Costco Wholesale Corp. on Valentine’s Day 2013.

According to the original suit, a shopper at a Costco in Huntington Beach, Calif. first made Tiffany aware that Costco was selling rings marked as Tiffany.

From there, the New York-based retailer launched its own investigation and, according to the lawsuit, eventually discovered that for years Costco had been selling rings in its stores with signs reading “Tiffany” but not labeling them as such online. This was done so Tiffany wouldn’t find out about it via its normal trademark policing procedures, the lawsuit states.

In a company statement issued late Tuesday, Tiffany general counsel Leigh Harlan said, “We are gratified that the court found that Costco’s use of the Tiffany trademark infringed on our rights. We believe this decision further validates the strength and value of the Tiffany mark and reinforces our continuing efforts to protect the brand.”

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