Tiffany & Co. v. Costco Wholesale Corp.
127 F. Supp. 3d 241
S.D.N.Y.2015Background
- Tiffany owns numerous federally registered marks for the word "Tiffany," including long‑standing registrations for jewelry (use in commerce since 1868).
- In 2012 Tiffany discovered rings at Costco displayed with signs reading "Tiffany" though the rings were not manufactured or licensed by Tiffany; Costco agreed initially to remove such references and offered refunds to affected customers.
- Tiffany sued Costco (Lanham Act and New York state claims) alleging trademark infringement, counterfeiting, dilution, unfair competition, false advertising, and related claims; Costco counterclaimed that "Tiffany" is generic for a prong setting and asserted fair‑use defenses.
- After discovery the parties filed cross‑motions for summary judgment: Tiffany sought findings of liability and dismissal of Costco’s defenses/counterclaim; Costco sought to limit damages theories, bar punitive/dilution recovery, dismiss time‑barred claims, and strike the jury demand.
- The court granted Tiffany’s motion in full: held Tiffany’s marks valid; Costco liable for trademark infringement and counterfeiting; Costco’s fair‑use defense and genericism counterclaim were dismissed.
- The court granted in part Costco’s motion: it dismissed Tiffany’s claims for profits from non‑subject goods and memberships, barred recovery for alleged infringements before Feb 14, 2007, denied monetary relief under federal dilution, and barred punitive damages under the Lanham Act; the court refused to strike Tiffany’s jury demand or state‑law punitive damages claim and allowed an accounting for profits tied to the infringing rings.
Issues
| Issue | Plaintiff's Argument (Tiffany) | Defendant's Argument (Costco) | Held |
|---|---|---|---|
| Validity of Tiffany mark | Tiffany’s registrations are prima facie valid and long‑used | "Tiffany" is generic for a prong ring setting in some contexts | Mark is valid; Tiffany has prima facie ownership; Costco produced no admissible evidence undermining validity |
| Likelihood of confusion (infringement) | Use of identical word on display tags next to similar rings caused consumer confusion (surveys + customer depo) | Term used descriptively; survey flaws; lack of contrary survey evidence | Likelihood of confusion established as matter of law; summary judgment for Tiffany |
| Counterfeiting | Costco’s display/placement of identical word mark beside rings and evidence of copying show counterfeiting | Rings bore non‑Tiffany inscriptions/packaging, so not counterfeit | Counterfeiting established; contextual use (signage/display) sufficient despite non‑Tiffany stamping |
| Fair use defense | N/A | Costco claims descriptive use "other than as a mark" and in good faith | Rejected: Costco failed to prove good faith; defense struck |
| Genericness counterclaim | N/A | Costco argued "Tiffany" is generic for a prong setting; offered lexicographical and expert declarations | Rejected: plaintiff’s survey showed primary significance as brand; Costco failed to raise genuine issue |
| Remedies: accounting of profits (scope) | Seeks defendant’s profits from subject rings, non‑subject goods, memberships | Non‑subject goods and membership profits unrelated and speculative | Accounting for profits allowed only for subject infringing rings; non‑subject goods and memberships struck |
| Remedies: punitive damages & dilution monetary relief | Seeks punitive damages and monetary relief for dilution | Punitive damages barred by Lanham Act; dilution damages limited by statute | Punitive damages barred under Lanham Act; state law punitive damages claim survives; federal dilution monetary relief barred (post‑2006 use requirement not met) |
| Statute of limitations | N/A | Claims for sales before Feb 14, 2007 are time‑barred under analogous NY limitations | Recovery barred for alleged infringements before Feb 14, 2007 |
| Jury trial demand | Seeks jury on factual issues including willfulness and profits | Argues claims are equitable so no jury | Jury demand preserved: willfulness and profits issues are triable to jury; equitable issues may be treated advisory |
Key Cases Cited
- Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492 (2d Cir. 1961) (sets multi‑factor test for likelihood of confusion)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (summary judgment standard on disputed material facts)
- Lane Capital Mgmt., Inc. v. Lane Capital Mgmt., Inc., 192 F.3d 337 (2d Cir. 1999) (registered mark presumed valid; burden on challenger)
- Tiffany (NJ) Inc. v. eBay, Inc., 576 F. Supp. 2d 463 (S.D.N.Y. 2008) (recognition of TIFFANY marks' fame and strength)
- George Basch Co. v. Blue Coral Inc., 968 F.2d 1532 (2d Cir. 1992) (principles governing accounting of profits and willfulness in trademark cases)
- Arrow Fastener Co. v. Stanley Works, 59 F.3d 384 (2d Cir. 1995) (quality of defendant’s product as a Polaroid factor)