Costco intentionally used the word “Tiffany” on display case signs to sell “inferior copies of an engagement ring for which Tiffany is renowned,” the jewelry company told the U.S. Court of Appeals for the Second Circuit in a court filing.
Costco is appealing a district court ruling that it acted in bad faith by using the Tiffany name to describe the setting style of its rings. The lower court in 2017 awarded Tiffany $8.25 million in punitive damages, plus $11.1 million in tripled lost profits damages.
A decision in the case could shed light on how to interpret the federal Lanham Act’s broad definition of counterfeiting. The appeals court could also clarify the methods for determining profits lost to counterfeiting.
Costco knowingly deceived consumers into thinking they were buying authentic luxury rings, Tiffany said. Costco had no proof that “Tiffany” is a generic word, or that it was the only way to identify the style of its discounted rings, Tiffany said.
The Second Circuit had placed the case on hold while Costco tried to alter the award. The U.S. District Court for the Southern District of New York rejected Costco’s request in January.
Debevoise & Plimpton LLP, counsel for Costco, declined to comment. Browne George Ross LLP is representing Tiffany.
The case is Tiffany & Co. v. Costco Wholesale Corp., 2d Cir., No. 19-00338, brief filed 7/24/19.