My Namesake Triumphs: Tiffany & Co. awarded $19.35 million

by Winthrop & Weinstine, P.A.
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The four year saga ended (at least for now) with Tiffany & Co. being awarded for its vigorous fight to maintain its trademark and protect against genericide.  As previously reported, Tiffany & Co. filed suit against Costco Corporation (“Costco”) to protect its trademark with respect to engagement rings on Valentine’s Day in 2013.  (Read my post here.)   On August 14, 2017, the district court increased a jury award to Tiffany & Co. to $19.35 million.  Costco asserts it will appeal – so the saga is not over yet.

In defending against the lawsuit, Costco argued that the “Tiffany setting” encompassing the famous TIFFANY mark is merely a generic term for a type of engagement ring.    You may recall my post where I asked if you thought TIFFANY was generic? (Read it here.)  The district court answered my question in a ruling in 2015:  No, it is not generic.   In ruling on this motion, the judge ruled that Costco willfully infringed the TIFFANY trademark by using it on signage and it was a key part of Costco’s marketing strategy.  Among other things, she relied on a study in doing so.

Costco did not like the ruling and appealed asking the Second Circuit to take up an emergency appeal because of the “ongoing, irreparable harm to Costco’s business reputation which [Tiffany & Co. had] acted to amplify through statements to news media.”   Two months later, the Second Circuit denied this request.

In a ten day trial in September through October 2016, a jury awarded Tiffany & Co. damages in an amount of $5.5 million (adding to the lower profits Costco had actually obtained) and an additional $8.25 million in punitive damages for Costco’s bad behavior.  However, in an Opinion on August 14, the district court judge did not think this was enough.  She explained that the jury’s verdict was advisory only as to recovery of profits and trebled the profits increasing the award of damages to $11.1 million, plus interest, and added the award of $8.25 million in punitive damages.  Accordingly, Tiffany & Co. was awarded $19.35 million dollars from Costco.  In addition, Costco is permanently barred from selling anything that Tiffany did not make as “Tiffany” products, unless Costco uses a modifier such as the product has a “Tiffany style” or a  “Tiffany setting.”

We will have to wait and see if the Second Circuit agrees that TIFFANY is not generic and affirm the award of $19.35 million to Tiffany & Co.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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