As the owner of a vast list of trade mark registrations for TIFFANY, it is unsurprising that well-known luxury jeweller Tiffany & Co took issue with US big-box retailer Costco's use of 'Tiffany' to describe engagement rings at point of sale in its stores.
In 2013 Tiffany & Co filed trade mark infringement proceedings against Costco in the US.
Costco looked set to have some measure of success, and be in a good position to negotiate settlement, after the US court denied Tiffany & Co's application for summary judgment. At summary judgment stage, the Court said Costco had provided enough evidence to show that TIFFANY might have become generic term to describe a style of ring setting.
Unfortunately for Costco, the next stage of the litigation was discovery. Discovery disclosed actual confusion among the purchasing public and bad faith efforts by Costco employees to trade off the recognisable Tiffany brand. As summarised by the Court in the most recent decision:
"Tiffany has submitted an email from Jodi Ellis, a Costco.com employee, in which she notes that she would like Costco’s jewelry boxes to have a more “Tiffany or upscale look.” Tiffany also cites the deposition of Jennifer Murphy, an inventory control specialist and jewelry buyer for Costco, in which she acknowledges that she received an email from a customer expressing confusion over the source of a Costco ring, but took no action to alleviate that confusion by making changes to the Costco’s jewelry case signage. Tiffany argues that Murphy’s testimony is indicative of Costco’s blatant efforts to copy Tiffany designs. In her deposition, Murphy also admits to having seen an email from a fellow Costco employee in which the employee stated that she “love[d] how [the vendor] just puts [his own] tags on the Tiffany & Co. pieces,” sold to Costco, and Murphy admits that she took no action to put a stop to this practice. Tiffany also highlights a series of emails and photographs that demonstrate Costco’s explicit efforts to copy Tiffany’s designs by making references to Tiffany designs and sharing links to Tiffany’s website."
In light of that overwhelming evidence, the Court concluded that there was no way Costco had acted in good faith when it used the TIFFANY mark in relation to the rings and decided Costco had engaged in trade mark counterfeiting.
Tiffany & Co also produced a survey demonstrating without any doubt that the purchasing public believed Costco's use of the word Tiffany was identifying the Tiffany & Co brand not the style. The Court concluded the mark had not become generic.
A slam dunk for Tiffany & Co. The jury awarded a total of US$16M against Costco. A case where a quick mea culpa in a private settlement would almost certainly have been the less painful option for the defendant (even if still expensive).
Of course, it is possible that Tiffany will become a generic descriptor of a kind of ring setting and able to be used by any person to describe that kind of setting. Any mark has the capacity to become generic unless a trade mark owner is vigilant. In this case, Costco's efforts to manufacture genericism were not a brilliant idea and clearly didn't cut it.