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    Feb 20

    Costco Wholesale

    Costco allegedly scored a large number of diamond sales, sales which Tiffany & Company believe to be trademark infringement and false advertisement. The two merchandising behemoths have protected their trademarks fiercely in the past, leaving confusion as to how Costco managed to sell “Tiffany” engagement rings for years without Tiffany’s knowledge or agreement. To reciprocate, Tiffany & Co. presented Costco with a lovely Valentine’s gift this past Thursday – a lawsuit in the U.S. District Court of New York.

    Insult and Injury

    Tiffany’s maintains that Costco’s standards are far beneath theirs, and to put the Tiffany name on discount Costco goods cheapens their products. As for Costco, they were able to progress their global marque by selling engagement rings labeled Tiffany even though it was illegal. Tiffany & Company has sold high-end jewelry for nearly 200 years and is one of the most trusted jewelry brands in the world. Stealing their label not only insults the Tiffany name, but injures their ability to compete fairly in the marketplace. Nevertheless, their lawsuit against Costco isn’t just about property rights to the name Tiffany; it is a broad complaint that covers deceptive advertising and bad business practices.

    Who Will Pay the Ultimate Price?

    Intellectual property law is strictly enforced in the United States. In some cases when a brand name is diluted enough to become a generic descriptive phrase, like with Xerox, the offender may lose its trademark rights for failing to defend them earlier. Tiffany & Company are at the beginning of a long battle and are trying to save the name they’ve been building since 1837. Put yourself in Tiffany’s shoes. You wake up to find that your customers are going to Costco to buy what they believe is an authentic Tiffany ring for a less expensive price. Not only have you lost the sale, but now your luxury trademark also equates to: “Sold for a discount at Costco.”

    The Customer is Always Right

    According to Craig Jelinek, President & CEO of Costco Wholesale Corporation, confused members can obtain a full refund under their long standing Membership Satisfaction Policy. With many of the rings already bought and given to a significant other, it’s unlikely that anyone will admit that they gave their loved one a fake “Tiffany” ring. It seems like Costco has pulled a fast one, but whether their reputation holds up in both a court of law and the court of public opinion is yet to be seen.

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