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The Term TIFFANY Is Not Generic For A Ring Setting

This blog post is a follow-up to our post entitled, Has One Of Tiffany And Company’s Trademarks Become Generic? posted on February 14, 2014. The U.S. District Court for the Southern District of New York answered the question we asked in our previous post after a two year court battle and the answer is no. Costco Wholesale Corporation (“Costco), the discount retailer displayed the term TIFFANY next to several diamond rings for sale, none of which were manufactured by Tiffany & Co. (“Tiffany”). Tiffany filed a lawsuit alleging trademark infringement, false advertising, unfair competition, counterfeiting, and dilution among other claims.

Costco counterclaimed alleging that the term Tiffany is generic for ring settings with six prongs. A trademark can become generic if the meaning becomes associated with the category of goods and services and the mark can no longer distinguish the goods and services on the basis of source. Essentially, Costco was alleging that the public had appropriated the term Tiffany to mean all rings with a particular setting type. See our blog post of February 14, 2014 where we discuss the legal concept of genericide.

Tiffany offered a significant amount of evidence to rebut Costco’s genericism claim. Among the evidence was a study of consumers. The study consisted of a survey administered to 464 men and women over the age of 21. The studied group received training for the survey. The group was first given a list of words and was asked to identify which words were brand names and which were descriptive terms. Then, they were each given a context to evaluate whether the term Tiffany was a brand name or a descriptive term. Nine out of ten of the prospective consumers considered Tiffany to be a brand identifier. Costco submitted evidence to rebut the survey. However, Costco was unable to raise a material issue of fact with respect to whether the primary significance of the Tiffany mark to the relevant public was a generic descriptor or a brand identifier. Therefore, the Court held that the counterclaim would be dismissed.

The Court also reviewed the Polaroid factors to determine if there was a likelihood of confusion between the marks and whether Costco had infringed Tiffany’s trademark. See Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492 (2d Cir. 1961). The two primary factors in any likelihood of confusion analysis are the similarities between the marks and the relatedness of the goods and services. Similarites between the marks was of course found because the marks are identical. In addition, there was no question that Tiffany products and Costco products were in competition with each other, therefore the Court also found relatedness of the goods.

Regarding some of the other Polaroid factors, although actual confusion is not required to be shown under the Polaroid factors, Tiffany presented evidence from the testimony of multiple consumers alleging that they were confused by Costco’s signage displaying the term Tiffany next to Costco’s unbranded rings in the display case. Regarding the strength of the Plaintiff’s mark, Tiffany offered uncontroverted evidence demonstrating the strength of its mark and the strong brand-name recognition it maintains in the area of diamond jewelry. The Court then examined whether Costco exhibited good faith in adopting the TIFFANY mark. Contrary to Costco’s assertion that it simply was using the term Tiffany in a descriptive and generic manner, the evidence showed otherwise.

The evidence showed communications between Costco’s employees and its vendors wherein the employees asked the vendors to copy Tiffany’s designs. Regarding the quality of Tiffany’s products, there was ample evidence to demonstrate that Tiffany’s goods have achieved a reputation for superior quality. Moreover, there was evidence to support Tiffany’s allegations that Costco did not have adequate quality control measures for its jewelry and thus Costco’s goods were of an inferior quality. This being the case, the Court reasoned that Tiffany’s reputation could be compromised by Costco’s sale of rings under the TIFFANY mark. In the end, the Court held that Costco was liable for trademark infringement.

Tiffany’s survey evidence proved to be a critical tool in this case. In fact, if Tiffany had conducted a consumer survey on genericness, before the first motion for summary judgment, that motion may have been granted. Although, consumer surveys may be expensive to conduct, such evidence can be strong evidence of trademark infringement. If you have a question regarding trademark infringement or a general question concerning trademarks, please feel free to contact our office for a courtesy consultation.