Parody is in the Eye of the Beholder

After reading our previous blog below about Louis Vuitton’s lack of success we thought it would be interesting to look at another parody case with a very different outcome. This case was between Tiffany and Costco.

Costco had used the term “Tiffany” on signage for diamond engagement rings that were not made by Tiffany. Costco’s claim that “Tiffany” is a generic term for a kind of ring was rejected. Judge Swain in the District Court found that Costco had infringed Tiffany’s trademark by selling the rings and that consumers would have been confused by the use of the wording. Swain remarked that “despite Costco’s arguments to the contrary, the court finds that based on the evidence, no rational finder of fact could conclude that Costco acted in good faith in adopting the Tiffany mark.”

Tiffany depends heavily on its reputation and the recognition that comes with its notable brand. Cosco is known for selling known brands at a discount, so it could be easy to see how some customers may assume that they had found a great bargain. One couple testified that they had believed that they were getting a genuine tiffany ring and were devastated to learn that the engagement ring was not a Tiffany piece. The couple only discovered that the ring was not authentic when the ring’s stone fell out.

Cosco agreed to remove all signage and sent letters to the known purchases to let them know that they could return the jewellery for a refund if they felt they had been misled.