Tiffany " Co. Rings has currently won a case against Costco due to trademark infringement and selling rings bearing the name Tiffany without authority of the company or trademark licensing board. Costco on the other hand argued that the imposed fine of $19.4 million is too high and unacceptable since there are generic terms that are not governed by Trademark license. In essence, Costco’s declaration that they were using a generic term, ‘Tiffany Setting’ used by different companies in the jewelry industry could have been justified if they had used the whole name without using Tiffany name alone. Failure to adhere to such trademark policies saw numerous customers buy engagement rings thinking they were produced by Tiffany that culminates to trademark infringement and Tiffany’s rights. The state did not issue Tiffany’s trademark license for competitors to use without the company’s consent.
Main topics of licensing challenged in Tiffany vs. Costco Case
Trademark Infringement
Costco had no rights to use Tiffany’s trademark to attract more customers since the state that provides licenses declares such practices are illegal. Trademark infringement may affect the value of a brand and lead to bad reputation of a company. Furthermore, the state provides companies with trademark rights in order to reduce bad competition, thus Costco was wrongly using the term Tiffany (Wiener-Bronner). During trials, some customers claimed that they had bought Tiffany rings from Costco thinking that they were brands produced by Tiffany " Co. that calls for legal actions due to trademark infringement.
Trademark Counterfeiting
Provision of counterfeit products by Costco bearing Tiffany’s name is another licensing issues presented in Tiffany vs. Costco case. Tiffany’s official did their research and found out that Costco was selling low quality and low priced rings bearing Tiffany’s name to attract more customers ("Judge: Costco Must Pay Tiffany $19.4 Million For Advertising Knock-Off Rings."). Companies are provided with trademark rights by the state in order to reduce the issue of counterfeit products that may bear the name of established brands. Thus, Tiffany was claiming that selling of low quality engagement rings by Costco under the name Tiffany was not only infringing trademark rights, but was also providing challenges to Tiffany in their strategies to protect customers’ value (Wiener-Bronner). Furthermore, Costco had been providing not only counterfeit rings bearing the name Tiffany, but had gone ahead and labeled different types of rings as Tiffany ("Judge: Costco Must Pay Tiffany $19.4 Million For Advertising Knock-Off Rings."). Nonetheless, Costco claimed the judgment was not fair since they were not using brand packaging styles used by Tiffany. Implementing such strategies leads to trademark counterfeiting since licensing agreements do not allow a company to provide counterfeit goods under the name of another company.
Generic Terms
Costco’s argument about using the word Tiffany was that it is a generic term used by big companies to show the settings of the ring, thus it was not about trademark infringement or counterfeiting. Indeed, Costco’s official testifying in the case declared they used the term to refer to generic term ‘Tiffany Setting’ ("Judge: Costco Must Pay Tiffany $19.4 Million For Advertising Knock-Off Rings."). However, Costco’s use of the word Tiffany without the word Settings was against licensing laws because customers’ rights of purchasing the rights product based on their preference must be upheld (Wiener-Bronner). Organizations should never provide law quality products under the name of known brand because customer will not enjoy value of the product.
Conclusion
The decision to award Tiffany $19.4 million in compensation for trademark infringement and provision of counterfeit products by Costco under the company’s name was justified. Costco had all the rights to use generic term ‘Tiffany Setting’ since it is not registered as a trademark, but using Tiffany name alone was illegal. This is because some customers could have bought rings from Costco warehouse under the name Tiffany, but were not actual products of Tiffany " Co. These practices lead to bad competition and deprive customers the opportunity to enjoy the value of their respected brands. Thus, the judge provided the correct judgment in awarding Tiffany $19.4 million in compensation although Costco kept on claiming they were not producing imitations or counterfeit rings, but were using the generic term to show that they were producing high quality products.
Works Cited
"Judge: Costco Must Pay Tiffany $19.4 Million For Advertising Knock-Off Rings." USA TODAY. N.p., 2018. Web. 18 Apr. 2018.
Wiener-Bronner, Danielle. "Costco Owes Tiffany More Than $19 Million For Selling Counterfeit Rings." CNNMoney. N.p., 2018. Web. 18 Apr. 2018.
