Costco Wholesale Corp.’s claim that Tiffany setting is a generic term can proceed, a federal judge ruled on Jan. 17. 

Tiffany & Co. had asked a Southern District New York federal court for a summary dismissal of Costco’s contention, first advanced last year, that Tiffany setting was a generic term. But judge Laura Taylor Swain said a “genuine factual dispute” exists over whether the term is generic. 

Swain didn’t rule on the merits of Costco’s claim, adding that “none of the evidence is by any means conclusive of the proposition advanced by Costco.” 

Tiffany sued Costco last February, claiming the warehouse club was advertising rings falsely marked as being from Tiffany. In a counterclaim, Costco asserted that it was simply selling “Tiffany settings,” which it asked the court to rule was a generic term, like elevator or Pilates.

Among the witnesses Costco has recruited is Donald Palmieri, president of the Gem Certification & Assurance Lab. Palmieri said his research found that many jewelers have long used the term, and that Tiffany didn’t place a registered trademark next to the term until 2003.

The luxury retailer has argued that a “Tiffany setting describes only one thing, a particular style of engagement ring that was designed by [company founder] Charles Lewis Tiffany.” It also argued that Costco’s claim was irrelevant, since Costco used only the word Tiffany on the rings in question.

The judge’s ruling may make it more likely the case settles, since Tiffany does not want its famed setting termed “generic.”

“Tiffany has to ask: Is this case sufficiently important to put its trademark at risk?” David Weild, partner at Edwards Wildman, told JCK.  “It never helps to have adjudication that something is a generic term, because that opens it up to being used and abused.” 

Rob Bates

JCK News Director