Coincidentally (or perhaps by design), Tiffany and Company (“Tiffany”) filed suit on Valentine’s Day against Costco Wholesale Corporation (“Costco”) to protect its trademark with respect to engagement rings.  We know from our prior post regarding Tiffany’s amicus brief filed in support of Christian Louboutin that Tiffany actively protects its brand.

If you are like me, you too may stockpile and treasure robin egg blue boxes, bags and jewelry pouches.  Yes, Tiffany has a color trademark too.  Most people, if not all, would consider TIFFANY to be a famous trademark.  Such trademarks and service marks have gained a high level of recognition with the public.  The Federal Trademark Dilution Act of 1995 (“the Act”) does not include a definition for “famous” trademarks.  Instead, like pornography, the courts “know it when they see it.”  Examples of other famous trademarks that come to mind are XEROX, KODAK, COCA-COLA and ADDIDAS, to name a few.

Tiffany has alleged that Costco was selling diamond engagement rings as “Tiffany” rings.  As alleged by Tiffany, Costco was careful not to advertise on its website using “Tiffany” because this would have made it easier to detect by Tiffany’s army of attorneys protecting the brand.  Tiffany alleges, and I have heard from my parents, that there are Costco customers who thought they were actually buying a famous TIFFANY product at a discount price.  Understandably, Tiffany (who charges much more and is known as a luxury goods store) would want to protect its trademark and brand from such confusion in the marketplace.

Specifically, Tiffany has brought claims against Costco for trademark infringement, counterfeiting, unfair competition, injury to business reputation, false and deceptive business practices, and false advertising.  If Tiffany proves that Costco was selling a counterfeit product, it would be another example supporting reports that counterfeiting is a serious problem in the United States (both internally among U.S. companies and from companies abroad).  Some of the most popular products to counterfeit are jewelry and watches sold by Tiffany, as well as purses, wallets, apparel, toys, and computers.  In any event, it will be an interesting case to follow.  Does anyone know of other recent instances where a luxury brand store has sued a discount chain store to prevent eroding its brand?