Tiffany & Co. (NYSE:TIF), one of the world’s most famous manufacturer and retailer of high-end jewelry, filed a lawsuit against Costco Wholesale Corporation (NASDAQ:COST), alleging that the company is selling discounted engagement rings falsely labeled as “Tiffany.”


Based on the lawsuit filed by the famous jeweler with the United States District Court of Southern District of New York, Tiffany& Co. accused Costco of trademark infringement, counterfeiting, deceptive business practice, and false advertising.

According to the jeweler, in November 2012, a disappointed consumer complained to Tiffany & Co (NYSE:TIF) that Costco Wholesale Corporation (NAADAQ:COST) was offering diamond engagement rings labeled as “Tiffany” for sale in its store at Huntington Beach, California.

The jeweler investigated the report and confirmed that a jewelry display at the Costco store in Huntington Beach was selling engagement diamond rings labeled “Tiffany,” but the rings were not manufactured, licensed, approved or in any way associated with Tiffany & Co.

The rings label read “Platinum Tiffany 0/72 VS2, 1 Round Diamond Ring” and “Platinum Tiffany VS2.1 1.00CT Round Brilliant Solitaire Ring.”  Both items were on sal for $3,199.99 and $6,399.99, respectively. A Costco salesperson referred to the products as “Tiffany rings” and confirmed that the store generally carries one of each of the item.

The lawsuit cited that Tiffany immediately confronted Costco regarding the issue, and it removed all Tiffany references to the jewelries from the product signage.

According to Jeffrey Mitchell, the lawyer representing Tiffany & Co (NYSE:TIF) said many Costco members may have mistakenly bought the rings with the belief that they were buying Tiffany. He said, “One of the reasons to file the lawsuit is to get all the information about what was going on at Costco, how long and why. The lawsuit will hopefully answer those questions.”

The lawsuit cited that Costco seemed to be selling different styles of rings for many years that were falsely identified as “Tiffany.”  The jeweler found out that Costco avoided detection of its unlawful business practices by not using the Tiffany trademark in selling the same rings online.

Tiffany emphasized in the lawsuit, “As a result of the foregoing, unbeknownst to Tiffany, Costco was able to sell in warehouse stores around the United States for many years…engagement rings falsely identified as “Tiffany,” and thereby unlawfully trade off Tiffany’s goodwill and brand awareness to increase its own sales including member acceptance of Costco as a retailer of high-end jewelry products.”

Tiffany & Co. seeks punitive and monetary compensation including attorneys’ fees for all the damages caused by Costco Wholesale Corporation (NASDAQ:COST).