Tag Archives: Tiffany

Costco neko wo kamu

BrozikIf Tiffany was miffed at Costco before, it’s positively infuriated now.

You will recall that on February 14 the high-end jeweler Tiffany & Co. sued the decidedly-not-high-end warehouse club Costco, alleging that the latter was describing certain diamond rings as “Tiffany” rings in at least one of its locations, thus infringing upon the trademark rights of the former. For a refresher, see here.

What struck this writer as interesting about the otherwise not especially remarkable matter is the barely-concealed disdain for the defendant and its merchandise-for-the masses business model permeating the federal court complaint of the elite plaintiffs. Tiffany made an effort at civility in its initial filing… but now the kid gloves are off. Costco has asserted a counterclaim—and that counterclaim has already gotten Tiffany’s goat.

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The gist of Costco’s counterclaim is that notwithstanding the registrations held by Tiffany & Co. for various trademarks that include the name Tiffany for use with regard to jewelry products, the term “Tiffany” is generic for a type (or set of types; it’s not quite clear)  of diamond ring setting, such that anyone must be permitted to use the term (inasmuch as anyone may sell a diamond ring with that certain kind of setting). Costco’s Answer and Counterclaim reads, in pertinent, unrepentant part:

Costco asks the court to order that the Plaintiffs [Tiffany and Company and Tiffany (NJ) LLC] be prohibited and enjoined from ever again asserting false claims of right to exclude use of Tiffany as a generic term for a style or type of ring setting. *** Costco seeks a judgment declaring invalid, and ordering modified or partially cancelled, federal trademark registrations which the Plaintiffs have put forward as purportedly evidencing or supporting false claims of right to prevent Costco and other retailers from using the word Tiffany to indicate that a ring has a Tiffany setting, i.e., a setting comprising multiple slender prongs extending upward from a base to hold a single gemstone….

There’s a Japanese proverb—kyuuso neko o kamu: A cornered rat will bite the cat. Tiffany put Costco in the corner, and now Costco is attempting to bite off part of Tiffany’s trademark portfolio. Tiffany might come to find that it would have been better off letting sleeping dogs… er, you know what? Enough with the animal metaphors. Tiffany could regret suing Costco, if Costco’s possibly-desperate defense holds water.

Tiffany replied a couple of days ago, March 14, to Costco’s answer and counterclaim, filed on March 8th. Tiffany asserts in its answer to Costco’s counterclaim that Costco’s signage did not indicate that the offending rings sold in Costco warehouses (not manufactured by Tiffany) had “Tiffany settings” but rather appeared to describe each ring as a “TIFFANY… DIAMOND RING.” A good point—but now there are two issues. Read More…

We can infringe upon you wholesale

Brozik

[Editor’s note:  When this was first posted, I — not Matthew, I, Ron Coleman — failed to utilize the drop-down box and make sure that MDB showed as the author of this piece, probably thinking that the picture at left would do the trick.  Based on some blog posts, um, it didn’t.  Sorry to all concerned!]

On Valentine’s Day, appropriately enough perhaps, Tiffany (the jeweler, not the singer) filed a complaint against Costco in the United States District Court for the Southern District of New York, asserting a variety of trademark-related causes of action. The lawsuit is not extraordinary by any means. The alleged facts, summarized below, are not scandalous, even if they describe an underhanded practice:

A woman complained to Tiffany & Co. about something she had seen at a Costco warehouse in Huntington Beach, California—to wit: diamond rings for sale, described in signage at the display case as “Tiffany” rings. (The woman was reportedly “disappointed” by her “observ[ation].”)  Costco investigated and confirmed what the woman had described: Costco was selling jewelry (mis)labeled as Tiffany items. (A saleswoman referred to the rings as “Tiffany” rings, and said that the store generally carries only one of each at a time.)

But Tiffany has never permitted its merchandise to be sold by Costco; apparently, something was amiss. The items sold by Costco were not in fact Tiffany items—not even in the way that other higher-end watches, for instance, sold by Costco are the real things (even if not every higher-end watchmaker is happy about it; see Omega S.A. v. Costco Wholesale Corp., the Ninth Circuit matter addressing whether the first-sale doctrine is a defense against claims of infringing distribution and importation for unauthorized sale of authentic items incorporating designs protected by copyright.) Tiffany found that Costco was selling the items in question online as well, but not labeled “Tiffany” there.

Tiffany confronted Costco with its discovery, and Costco immediately removed all misleading signage. The damage had been done, however. The complaint alleges (or at least suggests) that the offending practice was not limited to the Huntington Beach warehouse, but rather was widespread throughout Costco’s locations nationwide, for many years. “There are now,” according to the complaint, “hundreds if not thousands of people who mistakenly believe they purchased and own a Tiffany engagement ring from Costco.”

So what makes this case interesting? A few minor things, to my mind, and one more significant. Read More…

Best of 2011: Poor eBay!

First posted April 27, 2011.

News item:

eBay just reported first quarter earnings today posting revenue of $2.5 billion, an increase of 16% from the same period of 2010. eBay’s net income on a GAAP basis of $475.9 million, or $0.36 per diluted share, and non-GAAP net income of $619.0 million, or $0.47 per diluted share, representing a 12% increase compared to the same period of 2010. The retail giant narrowly beat analyst expectations, which were 46 cents per share on revenues of $2.48 billion. eBay says that the first quarter increase in earnings was due primarily to sales growth and a lower effective tax rate.

Nice!  I wish I had one of those.

But it does bring to mind the following bunch of words I do have, and which I wrote on this very place in space, on the topic of eBay’s essentially unconditional non-liability for contributory trademark infringement in connection with the sale on eBay of counterfeit goods:

Willful blindness, evidently, is a good standard to spank flea market zhlubs who “should have known” vendors who rent tables from them are selling counterfeit goods.   It doesn’t apply, however, to billion-dollar companies that are “too big to be liable” as contributory infringers or even  accountable after the fact on some level (disgorgement?)  for the millions they rack up in commissions on counterfeit sales.

Ah, yes, but doesn’t the Circuit say, as quoted above?:

But we are also disposed to think, and the record suggests, that private market forces give eBay and those operating similar businesses a strong incentive to minimize the counterfeit goods sold on their websites. eBay received many complaints from users claiming to have been duped into buying counterfeit Tiffany products sold on eBay.  The risk of alienating these users gives eBay a reason to identify and remove counterfeit listings. Indeed, it has spent millions of dollars in that effort.

 

I’m disposed to think exactly the opposite–because:

  1. the law will not punish them for failing to do so;
  2. notwithstanding “many complaints” (it’s that Lanham Act “rigor” at work once again!),  most buyers of counterfeits want to buy counterfeits.  It’s not a matter of quality control:   These days, everyone except Archie Bunker who spends $45 for a “Romex” knows exactly what he’s buying.  But unless and until “private market forces” eliminate trademark law, notwithstanding that the sale of a fake Rolex or Tiffany item is entirely between “consenting adults,” it’s still an unlawful transaction;
  3. the “millions of dollars” spent by eBay was spent precisely to obtain an opinion like this by a court that doesn’t really “get it”; and
  4. eBay makes money selling counterfeits!  Even the Circuit had to acknowledge this fact, which it does in a little-bitty footnote and then completely ignores.

Yes, they make a lot of money, they do, at eBay.  Why the company is exempt from any responsibility to compensate victims of trademark infringement via a system it has established — notwithstanding their notice-and-takedown system — merely because it has spent “millions” on trying, a number that is both vague and which the court made no attempt to relate to the profits or the damages involved, remains beyond my understanding.

 

Poor eBay!

News item:

eBay just reported first quarter earnings today posting revenue of $2.5 billion, an increase of 16% from the same period of 2010. eBay’s net income on a GAAP basis of $475.9 million, or $0.36 per diluted share, and non-GAAP net income of $619.0 million, or $0.47 per diluted share, representing a 12% increase compared to the same period of 2010. The retail giant narrowly beat analyst expectations, which were 46 cents per share on revenues of $2.48 billion. eBay says that the first quarter increase in earnings was due primarily to sales growth and a lower effective tax rate.

Nice!  I wish I had one of those.

But it does bring to mind the following bunch of words I do have, and which I wrote on this very place in space, on the topic of eBay’s essentially unconditional non-liability for contributory trademark infringement in connection with the sale on eBay of counterfeit goods:

Willful blindness, evidently, is a good standard to spank flea market zhlubs who “should have known” vendors who rent tables from them are selling counterfeit goods.   It doesn’t apply, however, to billion-dollar companies that are “too big to be liable” as contributory infringers or even  accountable after the fact on some level (disgorgement?)  for the millions they rack up in commissions on counterfeit sales.

Ah, yes, but doesn’t the Circuit say, as quoted above?:

But we are also disposed to think, and the record suggests, that private market forces give eBay and those operating similar businesses a strong incentive to minimize the counterfeit goods sold on their websites. eBay received many complaints from users claiming to have been duped into buying counterfeit Tiffany products sold on eBay.  The risk of alienating these users gives eBay a reason to identify and remove counterfeit listings. Indeed, it has spent millions of dollars in that effort.

 

I’m disposed to think exactly the opposite–because:

  1. the law will not punish them for failing to do so;
  2. notwithstanding “many complaints” (it’s that Lanham Act “rigor” at work once again!),  most buyers of counterfeits want to buy counterfeits.  It’s not a matter of quality control:   These days, everyone except Archie Bunker who spends $45 for a “Romex” knows exactly what he’s buying.  But unless and until “private market forces” eliminate trademark law, notwithstanding that the sale of a fake Rolex or Tiffany item is entirely between “consenting adults,” it’s still an unlawful transaction;
  3. the “millions of dollars” spent by eBay was spent precisely to obtain an opinion like this by a court that doesn’t really “get it”; and
  4. eBay makes money selling counterfeits!  Even the Circuit had to acknowledge this fact, which it does in a little-bitty footnote and then completely ignores.

Yes, they make a lot of money, they do, at eBay.  Why the company is exempt from any responsibility to compensate victims of trademark infringement via a system it has established — notwithstanding their notice-and-takedown system — merely because it has spent “millions” on trying, a number that is both vague and which the court made no attempt to relate to the profits or the damages involved, remains beyond my understanding.

 

eBay wins Tiffany case

Originally posted 2008-07-14 16:10:07. Republished by Blog Post Promoter

Reuters reports that Tiffany’s gamble has not paid off:

EBay Inc scored a major legal victory on Monday, when a federal judge ruled that Tiffany & Co failed to prove the online auctioneer was responsible for the sale of fake Tiffany jewelry on its website.

“The Court concludes that Tiffany has failed to meet its burden in proving its claims,” wrote U.S. District Judge Richard Sullivan in his opinion.

“Given Tiffany’s choice to sue eBay, rather than individual sellers, and this Court’s conclusion that eBay does not continue to supply its services to those whom it knows or has reason to know are infringing Tiffany’s trademarks, Tiffany’s claims against eBay must fail,” wrote the court.

The decision is here.

UPATE:  An eBay liability roundup here.

UPDATETER:  And a post-affirmation summary, and assessment, here.