Engaged in Counterfeiting

Trademark law often draws public interest because it involves familiar brands that we all use on a daily basis. And an important New York case, now on its way to the Federal Court of Appeals, involves a couple of big ones: Tiffany & Co. vs. Costco.

The Lanham Act, which is the federal statute under which trademark rights are granted, prohibits counterfeiting of registered trademarks. A counterfeit mark is one that is “identical or substantially indistinguishable” from a mark registered with the United States Patent and Trademark Office. A mark can be deemed counterfeit even when it’s not directly affixed to the goods it advertises, but counterfeiting has traditionally been found only in cases where the products advertised are an exact – or “stitch-for-stitch” – copy of those advertised under registered marks.

In the Tiffany/Costco case, Costco placed display signs bearing the word “Tiffany” on jewelry counters in which engagement rings were displayed for sale. Tiffany & Co. sued for trademark infringement and counterfeiting among other claims, but Costco argued that the word “Tiffany” was a reference to the cut of the rings it advertised rather than a suggestion that the rings were produced by the famous jeweler. Costco’s rings were stamped with the real manufacturer’s name and sold in an unbranded beige and red package, rather than the classic Tiffany blue. But Tiffany & Co. presented evidence that customers were confused by the signage and the jury found that Costco was guilty of trademark counterfeiting despite the lack of stitch-for-stitch copying. To date, Tiffany & Co. has been awarded more than $25 million in damages for the misuse of its registered trademark.

The case is currently on appeal with a decision due later this year, but the jury verdict is a good reminder to businesses big and small that references to famous registered marks should never be included in advertising, no matter how justifiable they may seem.

Of course, if you have any questions or concerns about the use (or misuse!) of a trademark, please contact our office at (248) 477-6300 or info@wrightbeamer.com.