District Court Awards Nearly $20 Million to Tiffany for Trademark Infringement and Enjoins Costco From Further Sales of Infringing Engagement Rings

Editors: John Sganga, Joseph Cianfrani and Boris Zelkind

Judgments & Awards

On August 14, 2017, a New York federal court determined that Tiffany and Company and its affiliate (“Tiffany”) were entitled to recover three times Costco’s profits for infringing the “TIFFANY” trademark in selling engagement rings. The total damage award included three times Costco’s profits, amounting to over $11 million, as well as punitive damages of over $8 million. The court had previously determined that Costco infringed Tiffany’s trademark by displaying diamond rings in cases marked “Tiffany” without an accompanying modifier such as “set” “style” “or “setting,” where the combined term “Tiffany setting” is a non-trademarked industry term for a particular engagement ring style. Tiffany’s recoverable profits were not limited to Costco’s 13% profit margin on jewelry sales. Recoverable profits were increased to just over 50% of the ring price, based on the additional profits Costco received from membership fees that Costco was able to sell because of the infringing engagement rings. Finally, the Court permanently enjoined Costco from using the standalone term “TIFFANY” in any marketing. The Court’s order comes after over 4 years of litigation between the parties.

This case is Tiffany and Company v. Costco Wholesale Corp, Case No. 13CV1041-LTS-DCF