Tiffany denies Costco’s generic trademark claims
Luxury jeweller Tiffany on Thursday disputed claims by Costco that its trademark ‘Tiffany Setting’ is generic.
The companies are embroiled in a trademark and counterfeiting dispute, with wholesaler Costco claiming last week that the ‘Tiffany Setting’ mark protecting the jeweller's diamond rings, which comprise prongs extending upwards and supporting a gemstone, is generic.
Costco was responding to the jeweller’s claims, filed in February this year, that it sold counterfeit Tiffany goods while promoting them as branded products. The wholesaler has asked a New York court to invalidate the ‘Tiffany Setting’ mark.
In its response to Costco’s counterclaims, Tiffany has denied that ‘Tiffany Setting’ is generic, claiming the rings it protects are manufactured to strict standards. “Anything else is fake,” the suit says.
Tiffany also claims Costco’s evidence highlighting the mark’s generic nature was culled from an “ad-hoc sampling of unreliable sources ... For example, one source says the diamond ‘is generally round’, and there needs to be a ‘six high prong head’. Another source wrongly says the setting is ‘named after Louis C Tiffany’”.
The suit points out that Tiffany’s original trademark claims were based not on the mark ‘Tiffany Setting’ but on the use of the name ‘Tiffany’. It has asked the court to dismiss Costco’s request to invalidate its mark and has reiterated its original claims about counterfeiting and infringement. .
Bridget Short, partner at Lathrop & Gage LLP in New York, said Costco’s claims about the mark’s generic nature – which were not an issue in the first suit – have forced Tiffany to act defensively.
“Both companies have come out swinging. Costco attempted to turn the tables, raising interesting issues that were unanticipated. Costco tried to create a cloud and now Tiffany is re-focusing on what Costco allegedly did,” she said.
Peter Berger, partner at Levisohn Berger LLP in New York, said Tiffany’s response doesn’t address Costco’s generic claims in detail and shows the jeweller does not want to litigate over the disputed nature of the trademark.
“If the mark becomes generic, Tiffany would lose overall exclusivity of the name, weakening the trademark overall,” he said.
To prevent a court ruling that its mark is generic, Berger said Tiffany will have to show that it actively polices it to prevent people using it without permission, adding: “Tiffany has a fairly aggressive approach to stopping the unauthorised use of its mark.”
The parties are now expected to begin liaising to arrange a court hearing. Short said it was too early to tell whether a settlement was likely.
