Tiffany & Co. (TIF:US) accused Costco Wholesale Corp. (COST:US) in a lawsuit of selling counterfeit Tiffany diamond engagement rings at discount big-box prices not befitting the mystique of its iconic blue-box.
Costco isn’t authorized to sell Tiffany items, the New York-based jewelry retailer said in a complaint filed yesterday in federal court in Manhattan.
Tiffany said it was alerted by a customer in November who saw signs offering “Tiffany” rings in a Huntington Beach, California, Costco store.
“Costco had apparently been selling different styles of rings for many years that it has falsely identified on in-store signage as ‘Tiffany,’” according to the complaint.
The Issaquah, Washington-based company, which runs more than 600 warehouse stores, has led customers to believe they were buying authentic Tiffany items at discount prices, Tiffany said. The sales “unlawfully trade off Tiffany’s goodwill and brand awareness,” it said.
‘Tiffany, which has sold trademarked luxury items for 175 years, is seeking to prevent further sales of counterfeit diamond engagement rings as well as unspecified damages associated with prior sales, the company said in the complaint.
“We now know that there are hundreds if not thousands of Costco members who think they bought a Tiffany engagement ring at Costco, which they didn’t,” Jeffrey Mitchell, a lawyer for Tiffany, said in a statement. “Costco knew what it was doing when it used the Tiffany trademark to sell rings that had nothing to do with Tiffany.”
Joel Benoliel, Costco’s chief legal officer, didn’t immediately reply to a voice-mail message left at his office seeking comment about the lawsuit.
The case is Tiffany and Co. v. Costco Wholesale Corp., 1:13-cv-01041, U.S. District Court, Southern District of New York (Manhattan).
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