January 26, 2021 Top Story

Trademark Award Vacated Over Questions of Consumer Confusion

Differences in survey interpretation create triable issue warranting reversal

By Stephen Carr

A federal court of appeals threw out a $21 million judgment and remanded the case to determine whether a retailer infringed a trademark by marketing generic diamond engagement rings with the term “Tiffany.” The appellate court held that the district court erred by failing to consider the retailer’s evidence, which raised a triable issue as to whether consumers would be confused about the distinction between rings made by high-end jeweler Tiffany and Company and generic Tiffany-style ring settings. ABA Litigation Section leaders emphasize that the decision underscores the highly fact-specific nature of trademark litigation.

Tiffany & Co. sued Costco for allegedly misleading customers to believe they were purchasing Tiffany-brand rings rather than Tiffany-setting rings

Tiffany & Co. sued Costco for allegedly misleading customers to believe they were purchasing Tiffany-brand rings rather than Tiffany-setting rings

iStockphoto by Getty Images

Tiffany Diamond More Than a Mark?

In Tiffany and Co. v. Costco Wholesale Corp., the centuries-old jeweler Tiffany and Company accused big-box chain Costco Wholesale Corporation of violating the Lanham Act and New York law by using “Tiffany” to describe its rings. Costco maintained that it was entitled to use “Tiffany” because the term was not just a brand-name mark but also used widely in the jewelry industry to refer to a style of diamond setting made famous by Charles Tiffany in the mid-1800s.

Costco sells a variety of diamond engagement rings specifically produced for it by the jeweler R.B. Diamond, Inc., and which it refers to as “unbranded.” The rings are available in a variety of settings, such as bezel, cathedral, channel, and the Tiffany setting. The retailer displays the rings in prominent cases near the front of its stores with sale signs indicating the setting and, in more noticeable font, the price. Costco admitted that it sometimes used “Tiffany settings” in its marketing, and sometimes merely “Tiffany.”

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