In the wake of Tiffany & Co.'s $19 million award against Costco Wholesale Corp., Partner Michael Goldberg, Co-Chair of Pryor Cashman's Fashion and Licensing practices, spoke with Bloomberg BNA about the jewelry giant's decision to pursue a trademark suit against Costco.
In the lawsuit, which began in 2013, Tiffany claimed that Costco had infringed its trademark rights by selling diamond engagement rings that were marketed using Tiffany's name. The rings at issue bore a setting commonly known as a "Tiffany" setting, but were displayed and described as "Tiffany" rings, rather than "Tiffany setting" or "Tiffany style" rings.
The $19 million award issued by Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York was based on punitive damages of $8.25 million, plus a tripled-profits calculation of $11.1 million, the latter stemming from Costco's counterfeit use of the Tiffany mark.
Tiffany "made a calculated decision to bring this action based on the use of Tiffany as a standalone mark" because of the risk presented by the idea that in some circumstances, consumers might perceive "Tiffany" as descriptive for a type of setting, Goldberg told Bloomberg.
Goldberg, who represents luxury brand owners such as Compagnie Financiere Richemont SA, owner of the Cartier brand, and Montblanc International GmbH, said it was important for Tiffany to take that risk: "These luxury goods companies' intellectual property rights are the most valuable property they have, and it's critical that they enforce their rights to protect their brands," he explained. "This is an example of a successful execution of that strategy."
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