A federal appeals court overturned a $ 21 million verdict against Costco Wholesale Corp. for infringement of the trademark over its marketing of diamond rings marked "Tiffany", and ruled that the court of first instance that had issued a first judgment in the case had failed to adequately consider opposing evidence.
The dispute arose from Issaquah, Washington-based Costco's sale of unfired diamond engagement rings identified by sales signs that contained the word "Tiffany", following Monday's decision by the 2nd United States Circuit Court of Appeals in New York Tiffany and Co. ; Tiffany (NJ) LLC vs. Costco Wholesale Corp.
New York-based Tiffany sued Costco in the U.S. District Court in New York, accusing the dealer of trademark infringement and counterfeiting in violation of the federal Lanham Act and New York law.
The verdict was overturned by a unanimous three-judge appeals court panel. At some point in the late 19th century, Charles Lewis Tiffany developed and sold an engagement ring that contained a certain style with a six-pole diamond setting, the decision says.
Since then, "many advertisements, dictionaries, trade publications, and other documents have referred to diamond setting reminiscent of the style of 'Tiffany settings,'" the decision said.
Costco's evidence "was sufficient to ask a question as to whether potential buyers of Costco's diamond engagement rings were in fact confused by the appearance of the word" Tiffany "on Costco's signs," the decision said.
It said that after the complaint was received, Costco sent a letter to all customers who had purchased the engagement rings with Tiffany settings and reminded them that its return policy gave them the right to return their rings at any time for full refund, but only 1, 3% of its customers returned their rings.
"Although a jury could reasonably conclude that Costco's interest in emulating Tiffany's designs was spread with the intention of misleading buyers as to the origin of its own jewelery, it may also reasonably conclude that Costco intended to lend" certain successful features " (from Tiffany's product) "without indicating that Tiffany did in fact manufacture or approve the jewelery in question," the decision said, referring to a previous case.
is automatically equated with an intent to deceive, ”the decision said, when he emptied the district court's judgment and withdrew the case for trial.
Leigh Harlan, Tiffany & Co. senior vice president, secretary and attorney general, said in a statement, "We are disappointed with the court's ruling, which finds that a jury rather than the judge should have decided the issue of liability in the first trial.
" We continue to believe that the district court was correct in its findings, and that the jury's discovery of damages, which resulted in a $ 21 million award to Tiffany & Co., is a clear indicator of the strength of the Tiffany brand and of the jury's outrage over Costco's actions.
"We have no authority to try this case again and remain convinced that a jury will find forgeries and violations at the trial, just as the district court judge originally stated."
Costco's lawyer had no immediate comment.