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Court Tells Costco to Pay $13.75M to Tiffany

Oct 6, 2016 8:14 AM   By Rapaport News
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RAPAPORT... Costco Wholesale was ordered to pay $13.75 million to Tiffany & Co. after selling counterfeit diamond engagement rings bearing the jeweler's name.

A Manhattan jury awarded Tiffany $5.5 million in compensation on September 29 and a further $8.25 million in punitive damages on October 5.

The trial, which began September 20, was aimed at determining how much Costco is liable for damages. Last year a court ruled Costco had willfully infringed Tiffany’s trademark by selling rings with its iconic name, Reuters reported.

The $5.5 million represents the profit Costco made from selling the rings that would fairly compensate Tiffany, the jury said, according to the Reuters report. Costco had initially argued it owed no more than $781,000 and said about 2,500 rings it sold were found by the court to have infringed Tiffany’s trademark.

Costco had further argued that Tiffany’s trademarks were invalid because they tried to stop others using the word “Tiffany” as a general description of a type of ring setting, the report said. U.S. district judge Laura Taylor Swain rejected that claim and said Costco confused customers by using the word Tiffany in display-case signs. Evidence showed Costco employees were aware of customer confusion but did nothing to remedy it, Reuters reported, citing Swain.

"We felt a responsibility to protect the value of our customers’ purchases and to ensure that Costco‘s customers were not misled about their purchases," Tiffany said in a statement. "It is critically important that the Tiffany name not be used to sell any engagement ring that is not its own.”

Costco said it will not comment as the jury's verdicts will be subject to further consideration by the court.
Tags: Costco, costco wholesale, engagement rings, Rapaport News, Tiffany, Tiffany & CO., tiffany setting, trademarks
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