Tiffany & Co. has filed suit against Costco Wholesale Corporation, claiming the discount giant has sold engagement rings falsely marked as “Tiffany” without its consent.
According to legal papers filed Feb. 14 in New York federal court, in November 2012 a customer alerted Tiffany that a Costco store in Huntington Beach, Calif., was selling diamond engagement rings marked by in-store signage as “Tiffany”—with one listed as a “platinum Tiffany .70 cts. VS2 round,” and another marked as a “Tiffany VS2 1 ct. round.” The company launched an investigation and now says that Costco had been selling several styles of rings in this way.
“Neither of the rings identified in the Huntington Beach store as ‘Tiffany’ was, in fact, a Tiffany ring, nor was it manufactured by, approved by, licensed by, or otherwise in any way properly associated with Tiffany,” according to the company’s legal papers. “Unbeknownst to Tiffany, Costco had apparently been selling different styles of rings for many years that it has falsely identified on in-store signage as ‘Tiffany.’”
Tiffany says it then contacted Costco, which removed the signage. However, the luxury retailer was apparently irked that “Costco was not using the Tiffany trademarks online … thereby avoiding detection of its unlawful activities by Tiffany’s normal trademark policing procedures.”
As a result, the filing charges that there are “hundreds, if not thousands of people who mistakenly believe they purchased and own a Tiffany engagement ring from Costco.”
“This is not the kind of behavior people expect from a company like Costco,” said Tiffany lawyer Jeffrey Mitchell in a statement. “Everyone knows that buying something on a street corner or over the Internet from an unknown source is risky. Until now, no one would have thought it could be risky to buy brand name merchandise from Costco as well.”
The statement further notes that Tiffany has never sold “its fine jewelry through an off-price warehouse retailer like Costco, either directly or indirectly.”
The suit seeks at least $2 million in damages, an injunction against Costco from using the Tiffany name, and for Costco to “publicly admit its misconduct” to customers who bought any rings labeled as “Tiffany.”
Costco did not respond to a request for comment from JCK, and has declined comment to other news sources.