Second Circuit Vacates Tiffany’s $21 Million Trademark Award Against Costco

Written August 18, 2020

The Second Circuit on August 17, 2020, vacated and remanded Tiffany & Co.‘s $21 million win in a trademark counterfeiting case against Costco Wholesale Corp. Tiffany & Co. v. Costco Wholesale Corp., 2d Cir., No. 19-00338, 8/17/20.

The Second Circuit rejected a Manhattan federal court’s finding that Costco purposely misled customers into believing rings it sold were Tiffany engagement rings.

Tiffany sued Costco in 2013 over its ring sales, arguing that Costco confused customers by using the word “Tiffany” by itself on signs in display cases.

The district court found Costco liable for trademark counterfeiting because Costco asked vendors to copy Tiffany designs and placed the rings next to signs identifying actual luxury-branded goods.

However, the Second Circuit found that the lower court wrongly decided the case at the summary judgment stage because a reasonable jury could have concluded that Costco’s use of “Tiffany” wasn’t likely to confuse customers and that Costco made fair use of the term.