Tiffany Acts Against Internet Sales of Counterfeit Jewelry

Tiffany & Co., the international luxury jeweler and retailer, has obtained federal court injunctions to stop Internet sales of counterfeit Tiffany jewelry allegedly sold by a Philadelphia jewelry company, said Tiffany's attorneys in a Jan. 14 announcement.

Attorney J. Scott Kramer of the Philadelphia law firm Duane Morris LLP, one of two firms representing Tiffany in the case, told JCK that the sales—which began in 1999—generated between $500,000 and $1 million.

"It is a matter of critical importance to Tiffany to protect its trademark and the confidence their customers have in it," Kramer said. "It's appalling that these sales have been going on openly for years on the Internet, affecting scores of purchasers."

It was complaints from some of those purchasers about the jewelry—which was sold under the Tiffany name—that last year led Tiffany & Co. to conduct a months-long investigation. In November, Tiffany filed suit in federal court in Philadelphia against Katz Imports Inc. of Philadelphia for allegedly selling counterfeit Tiffany jewelry through its Web site, www.pennsylvaniadiamondexchange.com, and on the eBay Web site under the seller name "Diamondpaige," says Kramer. (He noted that eBay had been "very cooperative" in the investigation and provided "thousands of pages of pictures and advertisements.")

In a statement released to JCK by Katz Imports attorney Jack Meyerson, the jewelry firm "vigorously" denied the allegations and disputed what it called "Tiffany's inflated claims of damages."

"Katz Imports is a highly reputable diamond and jewelry dealer in Philadelphia," said the statement. "The company has been a fixture on Jewelers Row for more than 20 years. Katz Imports has not, does not, and will not sell so-called knock-off jewelry."

The same day Tiffany filed its suit, the court issued a seizure order to the United States Marshals Service, which seized illicit diamond rings and bracelets located on the premises of Katz Imports Inc., along with receipts of sales.

Following a hearing in mid-December, the Philadelphia federal court issued a preliminary injunction against Katz Imports barring sales of the alleged counterfeit Tiffany jewelry. In January 2003, a New York federal court issued a preliminary injunction against a company called Gem Mill Inc., which Kramer said is the supplier of some parts of the counterfeit jewelry.

The case is still in the discovery stage, Kramer said, and Tiffany hasn't determined yet how much it will seek in damages and compensation. The case will probably come to trial by this fall.

Tiffany filed suit as part of its program to prevent counterfeiting and trademark infringement. The Tiffany name is "a symbol of the finest design and highest quality, and Tiffany & Co. is committed to maintaining its reputation and protecting its loyal customer base from such duplicity," says a company statement. Through its lawsuit against Katz Imports, says Tiffany, it is "seeking to prevent further sales of counterfeit jewelry, the disgorgement of profits earned from sales of counterfeit jewelry, and other penalties and legal remedies available under both state and federal law."

Tiffany & Co. has company-operated stores and boutiques in the Americas, Asia-Pacific, and Europe; a direct marketing division that includes business, Internet, and catalog sales; and a specialty retail division that includes the Little Switzerland Inc. stores.