In February 2013, Tiffany & Co. filed a lawsuit against Costco for selling “Tiffany” engagement rings. Costco defended their actions by stating that “Tiffany” was a generic diamond setting, not a brand. However, customers who shopped with Costco were not necessarily aware of what they were buying.
Costco filed a counterclaim disagreeing with the jeweler, saying that the term is in fact generic and can be used in its store promotions.
On Sept. 8, 2015, a U.S. District Court for the Southern District of New York granted Tiffany’s motion for summary judgment.
Earlier in the case, Tiffany won the right to contact 2,500 Costco customers to tell them that the rings did not come from Tiffany and that the Tiffany trademark was used in order to describe the cut and style of the ring, not the source. That turned into evidence that some consumers believed that the Costco use of the mark was done in order to show that those customers were buying rings from Tiffany itself, not cut in a certain style.
The one surprise in the case is that the judge made this ruling in Tiffany’s motion for summary judgment. A motion for summary judgment requires that both parties rely upon the facts of the case. Then the judge must look at the facts of the case in the favor of the party that is not making the motion (Costco, in this case). When I have had to respond to summary judgment motions, I have shown where my clients disagree with the moving party, trying to cut down the summary judgment motion at the knees.
This case shows that in using the trademark of another company, trying to argue that the mark is generic is usually not a good argument. It helps to speak to counsel to receive the correct advice about how the use of the trademark affects business. Is it really generic use or is it use only to confuse consumers about the quality of the products they are buying? Always talk to counsel in your marketing decisions.