Federal judge: Costco must pay more than $19 million for selling fake Tiffany rings

TiffanyLisa Maree Williams/Getty Images for Audi Fashion FestivalCostco owes Tiffany & Co. $US19.4 million after selling ‘Tiffany’ rings.

A federal judge ruled that Costco owes jewellery company Tiffany & Co. $US19.4 million after the budget retailer sold counterfeit diamond engagement rings using the Tiffany name.

On Monday, a US district judge ruled that the $US8.25 million in damages a jury ordered Costco to pay in October 2016 was an insufficient punishment. Judge Laura Taylor Swain determined that Tiffany deserves an additional $US11.1 million plus interest from the retailer, bringing the total to $US19.4 million.

Costco made an estimated $US3.7 million in profits selling items marketed as “Tiffany” engagement rings. While Costco argued that a “Tiffany-set” ring is an understood industry term, Swain determined that selling items simply as “Tiffany” rings was an infringement on Tiffany’s trademark.

Costco was also banned from selling rings or other items as “Tiffany” products in marketing and in-store labels, unless the budget retailer clarified that Tiffany is a descriptive word — not the brand itself — with a modifier such as “set,” “style,” or “setting.”

Costco said that it plans to appeal the decision, saying that the ruling is the product of “multiple errors in pretrial, trial, and post-trial rulings.”

“Tiffany & Co. did not claim in the lawsuit that it lost a single sale to Costco as a result of any sign,” the company said in a statement. “From a purchaser list of approximately 2,500, Tiffany identified fewer than 10 who said that they had misunderstood Costco’s signage. This was not a case about counterfeiting in the common understanding of that word — Costco was not selling imitation Tiffany & Co. rings.”

Costco has sold “Tiffany” rings since before 2007. Tiffany filed the lawsuit against Costco on Valentine’s Day 2013.

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