Luxury brand Tiffany is taking legal action against Costco for allegedly selling Tiffany-branded engagement rings that were actually counterfeit – and is seeking financial compensation for copyright infringement.
The trademark lawsuit has been filed in the Manhattan federal court and claims that Costco has been selling the rings as early as November 2011, NBC News reports.
According to the court documents, Costco tried to mislead customers into buying the baubles thinking they were Tiffany originals offered at a significant discount when, in fact, they were fakes.
Tiffany was first advised of this in November 2011, when a customer purchased a diamond ring from Costco thinking it was a Tiffany original and wrote back to say he was disappointed in its quality.
An investigation immediately revealed that this was not a singular case. In fact, Huntington Beach Costco was selling numerous rings branded as Tiffany even though they were not.
Costco salespeople were even referring to the rings as Tiffany to potential customers, in what was an obvious attempt to mislead them, the lawsuit says.
The lawsuit asks for “Costco to forfeit profits from the ring sales, plus damages of $2 million per infringement,” the publication says.
“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, is quoted as saying.
In arguing in favor of the lawsuit, he adds that Tiffany maintains “aggressive and rigorous intellectual property program, and regularly takes actions against counterfeiters and infringers.”
NBC News notes that many major companies take similar action in this kind of situations because having counterfeits on the market is bad for their brand.
So far, Costco is yet to comment on the claims made in the lawsuit.