Who can legally use the word Tiffany?

In February 2013 Tiffany & Co. filed a trademark infringement lawsuit against Costco Wholesale Corp. over Costco's promotion of four and six prong solitaire engagement rings described as "Tiffany setting" rings. The case: Tiffany & Co. et al vs. Costco Wholesale Corp, 2nd U.S. Circuit Court of Appeals, No. 17-2798. TCO alleged that Costco was unlawfully using the "Tiffany" trademark to describe products that were not made or licensed by Tiffany & Co.

Image Credit: The Fashion Law

First let's look at the allegations: In its initial filing against Costco in 2013, Tiffany & Co. argued that the Costco rings constituted trademark infringement and counterfeiting, it also contended that Costco had instructed its jewelry suppliers to copy Tiffany & Co. ring designs. The rings were packaged in light blue boxes during a Valentine's Day promotion. They argue it was possible customers were misled to believe that the rings were indeed manufactured by Tiffany & Co.

Costco’s defense was that it didn’t think “Tiffany” denoted a specific brand of ring. Instead, the retailer maintained that the word referred generically to a certain design typical of Tiffany products –' sort of like the way any lamp with stained-glass shading is called a “Tiffany" lamp.'

Tiffany & Co. was alerted in February 2013 by an upset client who questioned why Tiffany & Co. was discounting their rings at Costco. Tiffany's legal team investigated. Tiffany argued that the term “Tiffany engagement ring” is not a general descriptor of a type of ring in a pretty blue box, but actually designates a quality of style and design certified by Tiffany & Co. The case was heard in the US District Court for the Southern District of New York where, in 2015, Judge Laura Taylor Swain ruled in Tiffany & Co.'s favor.

A jury convened to set damages decided that Costco owed Tiffany $13.75 million in lost profits and punitive damages. After an appeal by Costco in 2017 , Judge Swain increased the damages to $21 million.

Costco appealed the ruling. In a 3-0 decision handed down on 17 August 2020, the Second Circuit judge Debra Ann Livingston upheld Costco’s appeal, ruling that the lower court had erred in making a summary judgment in Tiffany’s favor and that the case must be retried by a jury. In its appeal filing, Costco argued that the rings did not meet the standard for counterfeiting as they bore “non-Tiffany trademarks”, were not sold in Tiffany-branded packaging, and were not accompanied by Tiffany & Co. paperwork.

In the appeal the judge stated, “A jury could reasonably conclude that consumers of diamond engagement rings would know or learn that ‘Tiffany’ describes a style of setting not unique to rings manufactured by Tiffany, and [could] recognize [sic] that Costco used the term only in that descriptive sense. ” The dispute is over the use of the word “Tiffany”. Is it merely descriptive and therefore it falls within the boundaries of the “fair use” doctrine, as Costco has claimed? The judges ruled that a jury make that decision based on the case’s merits.

Both Tiffany & Co. and Costco feel confident in their arguments. How do you feel about the case?