Costco ordered to pay Tiffany over $19 mn for selling 'Tiffany' rings

Costco has been ordered to pay Tiffany & Co over $19 million for selling about 2,500 diamond rings falsely identified on store signs as ''Tiffany'' rings, by a federal judge.

US District judge Laura Taylor Swain wrote in her opinion on Monday that the management of the company, ''displayed at best a cavalier attitude toward Costco's use of the Tiffany name in conjunction with ring sales and marketing.''

The decision comes after a 2015 jury verdict, which found that Costco had received a profit of $3.7 million from falsely using the Tiffany brand, as it turned down Costco's argument that the word ''Tiffany,'' with reference to a ring's setting, had become a generic term, like Popsicle or dumpster.

Swain ruled Costco should pay Tiffany $11.1 million plus interest, which amounted to three times Tiffany's lost profit from Costco's actions plus $8.25 million in punitive damages.

Tiffany said in a statement to CNN the ruling ''validates the strength of the Tiffany trademark and the value of our brand, and most importantly, sends a clear and powerful message to Costco and others who infringe the Tiffany mark.''

"Costco's salespeople described such rings as "Tiffany" rings in response to customer inquiries, and were not perturbed when customers who then realized that the rings were not actually manufactured by Tiffany expressed anger or upset," wrote Swain.

Tiffany said the decision validated the strength of the company's trademark and sent a clear warning to competitors that infringed on it with false advertising or signs. According to Tiffany, although the legal battle focused on a few thousand rings, the case was important to protect its famed corporate identity.

"Tiffany is much more than a name," the company said in a statement. "It stands for responsible sourcing, exacting standards and exceptional craftsmanship."

Costco said it would appeal the ruling, contending that the decision was "a product of multiple errors" by the judge.

"The diamond ring in question had a pronged setting style that is commonly known as a 'Tiffany' setting," Costco said. "Costco intended that the word Tiffany in its signs convey only that the rings had this style of setting - not that the rings were Tiffany & Co. brand rings."