Tiffany won $21m from Costco's ring signs — an appeals court erased it

Costco sold unbranded diamond engagement rings with point-of-sale signs that read 'Tiffany' — 'Platinum Tiffany .90ct. Round Diamond' and similar labels for rings in Tiffany-style settings. On Valentine's Day 2013, Tiffany & Co. sued in Manhattan federal court: trademark infringement, counterfeiting and deceptive business practices. Costco's answer was that 'tiffany setting' had become a generic industry term for the six-prong solitaire — a description of a style, not of a brand.

Tiffany won. The district court granted summary judgment on liability, and after a bench trial on damages ordered Costco to pay more than $21 million — a warehouse chain told that borrowing a luxury name for a shelf sign carried a very large price.

Then the Second Circuit erased it. On August 17, 2020, a three-judge panel vacated the judgment: the lower court had decided factual questions that belonged to a jury — six documented instances of actual confusion across more than 3,300 purchases might be negligible; Tiffany's survey had flaws; copying a useful, unprotected attribute is not passing off; and the descriptive-fair-use defence was wrongly struck. On the eve of jury selection in July 2021, the parties settled confidentially and the suit was dismissed with prejudice. Costco called it 'amicable.' Tiffany declined to comment.