Tiffany Sues Costco for Selling Counterfeit Engagement Rings

A trademark lawsuit has been filed in Manhattan federal court by Tiffany & Co against Costco Wholesale Corp for selling counterfeit diamond engagement rings bearing the luxury retailer’s name.

Tiffany is calling on Costco to immediately halt the sale of the counterfeit rings, and pay them damages of $2 million per infringement.

In the lawsuit, Tiffany states it believes hundreds, if not thousands, of Costco customers purchased engagement rings from the box giant believing they were authentic Tiffany rings.

The case is not unusual. Other luxury retailers have been known to sue another retailer in order to stop sales of what they believe are imitation products being sold at a lower cost that cut into their own revenue streams.

The investigation began back in November 2012, when a Tiffany customer went shopping at a Costco in Huntington Beach, California. She saw store signs offering Tiffany diamond engagement rings for sale and complained to Tiffany Corporation about it.

Tiffany took the claim seriously and sent a representative to the same Costco location to investigate. They saw the fake rings in the display case at the store, labeled with the Tiffany brand, with a sales associate referring to them as “Tiffany rings.”

Upon further digging, Tiffany discovered Costco wasn’t using their trademark for the same online products in order to avoid detection.

Although Costco has yet to comment on the lawsuit, Tiffany’s lawyer released a statement saying, “This is not the kind of behavior people expect from a company like Costco, and this case will shed a much needed light on this outrageous behavior.”