Costco owes Tiffany & Co. $5.5M for selling ‘Tiffany’ rings
Costco will have to fork over at least $5.5 million to Tiffany & Co. after it sold about 2,500 engagement rings from display cases emblazoned with the name of the famed jewelry store.
The amount represents Costco’s profits from selling the rings.
A federal court jury will continue to weigh next week whether the Issaquah, Wash., company owes punitive damages.
The wholesale club claimed Tiffany was a generic description.
But during the trial, Judge Laura Taylor Swain was having none of it — noting that Costco’s jewelry buyers asked vendors to copy Tiffany designs and that Costco customers were confused about the brand.
Tiffany filed the lawsuit on Valentine’s Day in 2013.
“We believe this decision further validates the strength and value of the Tiffany mark and reinforces our continuing efforts to protect the brand,” the New York jewelry chain’s general counsel, Leigh Harlan, said in a statement a year ago after Costco was found liable.
The jury returned the $5.5 million award even though Costco argued that it earned just $781,000 from selling the knockoff rings.
Both companies declined to comment on the jury’s decision because deliberations are continuing and the judge will be issuing a final judgment in the coming weeks.
The $5.5 million represents 6 percent of Tiffany’s profits in its most recent quarter ended July 31.
For Costco, the award represents less than 1 percent of its profits in its quarter ended Sept. 29.
The timing couldn’t be better for Tiffany. The jeweler has been fighting an uphill battle this year against headwinds in foreign tourism and spending on luxury goods in general.
Tiffany shares gained 1.8 percent on Friday, to $72.63. Costco shares, mostly on the strength of good quarterly results, announced on Thursday, rose 3.4 percent, to $152.51.
With Post wires
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