Tiffany Sues Costco for Selling Fake Engagement Rings

Jewelry icon Tiffany is suing Costco for selling what it claims are fake engagement rings bearing the company's trademarked name. In addition to seeking the stop of all such jewelry, Tiffany is also asking for the profits made from the rings and $2 million per infringement, or piece, in damages.

"This is not the kind of behavior people expect from a company like Costco, and this case will shed a much needed light on this outrageous behavior," Jeffrey Mitchell, a lawyer for Tiffany, told Reuters. "Tiffany maintains an aggressive and rigorous intellectual property program and regularly takes actions against counterfeiters and infringers," he added.

This would be one of the largest companies Tiffany has ever accused, and gone after, in the courts. Costco is the world's leading in-bulk, low-cost stores, comparable to Sam's Club, which is owned by Sam Walton. It often delivers top-name brands at significantly lower costs thanks, in part, due to customer dues, which make up a significant amount of revenue.

The jewelry store was alerted to the alleged scam by a customer in Huntington Beach, Calif, who was disappointed with the selection of "Tiffany" engagement rings that she purchased at a Costco. She noted that a salesperson referred to the rings as Tiffany and assured her that they were original Tiffany rings when they were not.

"Costco knew what it was doing when it used the Tiffany trademark to sell rings that had nothing to do with Tiffany," Mitchell told the Associated Press. "We now know that there are at least hundreds if not thousands of Costco members who think they bought a Tiffany engagement ring at Costco, which they didn't."

Representatives from Costco have not spoken about the situation, which will soon go to court in New York City.

Tiffany famously sued online auction powerhouse eBay for selling rings with the Tiffany name, but lost the case in terms of damages. However, an injunction was awarded.