Tiffany & Co. wins £15m legal battle against Costco

NEW YORK, NY - JANUARY 12:  A flag for a Tiffany & Co. store hangs along Wall Street in Manhattan on January 12, 2015 in New York City. Shares in the luxury jewelry chain fell on news of weaker than expected holiday sales. Sales in November and December dropped 1 percent to $1.02 billion worldwide.  (Photo by Spencer Platt/Getty Images)

A legal dispute between American jewellery brand Tiffany & Co and US wholesaler Costco has reached its conclusion with Costco poised to pay higher damages than those handed to it at an earlier verdict. 

Costco is facing a $19.4m (£15m) bill in damages for infringing on Tiffany &Co’s trademark by selling “Tiffany” engagement rings.

Costco is set to appeal against the decision, according to the BBC. The wholesaler argues that “Tiffany” is now a generic term for the rings but it has been told it must call them “Tiffany-style” instead.

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The dispute centres on the sale of solitaire-style rings, comprising a diamond mounted on a single band with six prongs.

Costco sold 2,500 pieces with the label “Tiffany” resulting in a court ruling in October 2016 to pay $5.5m (£4.3m) in compensatory damages and $8.25m (£6.4m) in punitive damages.

On Monday it was ruled that the compensation was increased to $11.1m (£8.6m), while the amount of punitive damages still stands.

According to the BBC, Kate Swaine, a partner at law firm Gowling WLG, said: “This damages award may seem excessive given that only 2,500 products were sold, but if it can be argued that an infringement is blatant and where it relates to such a well-known brand, the claimant is entitled to seek punitive damages.

“Brand owners will welcome this decision as an indication of the risk that third parties run in trying to make associations with famous brands.”

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