Tiffany & Co. v. Costco Wholesale Corp., No. 17-2798 (2d Cir. 2020)Annotate this Case
Tiffany filed suit against Costco under the Lanham Act and New York law, alleging that Costco was liable for, inter alia, trademark infringement and counterfeiting in connection with its sale of diamond engagement rings identified by point-of-sale signs containing the word "Tiffany." The district court granted summary judgment for Tiffany and awarded Tiffany Costco's trebled profits along with punitive damages and prejudgment interest, for a total of $21,010,438.35.
The Second Circuit vacated, holding that the district court's determination was inappropriate at the summary judgment stage. The court held that Costco has raised a question of material fact as to its liability for trademark infringement and counterfeiting and, relatedly, its entitlement to present its fair use defense to a jury. In this case, Costco argued that it was using the word in a different, widely recognized sense to refer to a particular style of pronged diamond setting not exclusive to rings affiliated with Tiffany. Costco claimed that its use of the term was not likely to confuse consumers—the essence of a claim for infringement—and that even if some degree of confusion was likely, it was entitled under the Lanham Act to the descriptive fair use of an otherwise protected mark. Accordingly, the court remanded for trial.