Costco Sued for Selling “Tiffany Setting” Engagement Rings
By: Anny Mok
Tiffany & Co. has filed a lawsuit against Costco accusing the wholesaler of counterfeiting and trademark infringement. Costco advertises and sells engagement rings described as “Tiffany setting” or “Tiffany style”. Tiffany is concerned that customers are likely to be confused into believing that they are purchasing a Tiffany & Co. ring, which costs a lot more than the rings being sold by Costco.
Costco argues that there is no infringement because the term “Tiffany setting” is a generic term. It is well understood by the jewelry business that “Tiffany setting” simply describes an engagement ring style featuring a solitaire diamond. Costco claims that it is unlikely for customers to think they are purchasing a ring from Tiffany & Co.
In trademark law, a generic mark cannot be protected because it inhibits competition in the marketplace. Even if a mark has been registered in the federal registration system, it may lose trademark protection if it has become generic. A company may try to prevent genericide through active policing of the mark. However, prevention is difficult because it all depends on how consumers view the mark. Some examples of marks that lost trademark protection due to genericide include: “aspirin”, “cellophane”, “thermos”, and “zipper”.
Lawyers are at a disagreement over whether “Tiffany-style” or “Tiffany setting” is generic. Some believe that most consumers, when they see “Tiffany setting” will believe that they are buying a ring with a setting from Tiffany & Co. Other lawyers, such as Charles Colman, of the Law of Fashion blog, say that confusion is unlikely because the packaging is different and people shopping for rings will have sufficient knowledge to understand that “Tiffany setting” is only used to describe the ring style. A federal judge has yet to rule on this matter.