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Originally published February 14, 2013 at 6:31 PM | Page modified February 14, 2013 at 6:45 PM

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Tiffany sues Costco over engagement diamonds

Tiffany is suing Costco, claiming the wholesale club operator has been selling engagement rings wrongly labeled “Tiffany” rings.

The Associated Press

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Columbo, you seem to have a personal axe to grind. Do you work for Sams or something? T... MORE
The diamond industry is as corrupt as they come. Purposely inflated prices. If De Beers... MORE
Costco may be "discounting" diamonds, but they aren't discounting them enough... MORE

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NEW YORK — A Tiffany & Co. subsidiary is suing Costco, claiming the wholesale-club operator has been selling engagement rings wrongly labeled “Tiffany” rings.

The high-end jeweler filed lawsuit in U.S. District Court in New York on Thursday.

Tiffany alleges trademark infringement, counterfeiting, unfair competition, injury to business reputation, false advertising and deceptive business practices. The company says the rings are not in fact Tiffany rings, nor are they in any way properly associated with Tiffany.

Costco’s chief legal officer, Joel Benoliel, declined to comment on the suit because it is pending litigation.

Tiffany said a customer alerted Tiffany in November to the sale of what was promoted on in-store signs as “Tiffany” diamond engagement rings at a Costco store in Huntington Beach, Calif.

Tiffany immediately launched an investigation and said it learned that Costco has been selling different types of rings for many years identified as “Tiffany” rings, without the company’s knowledge.

The jewelry retailer said Costco led its customers to believe they were buying authentic Tiffany products at significant discounts.

“We now know that there are at least hundreds if not thousands of Costco members who think they bought a Tiffany engagement ring at Costco, which they didn’t,” Jeffrey Mitchell, Tiffany’s counsel, said in a statement.

“Costco knew what it was doing when it used the Tiffany trademark to sell rings that had nothing to do with Tiffany. 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.”

Issaquah-based Costco is the world’s largest wholesale club, with more than 600 sites worldwide.

Costco’s Benoliel was contacted by a Seattle Times business reporter.

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