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OH COSTCO, INFRINGEMENT AGAIN?

On August 14, 2017, District Judge Laura Swain, Southern District of New York, issued her Memorandum Opinion and Order ("Order") in the case of Tiffany and Company v. Costco Wholesale Corporation. In her Order, Judge Swain found that Tiffany is "entitled to recover trebled profits of $11.1 million" and "punitive damages of $8.25 million" against Defendant Costco. Judge Swain's Order follows her granting of summary judgment in favor of Tiffany "holding Costco liable for trademark infringement and trademark counterfeiting . . . with respect to engagement rings sold under [Costco] signage the referenced the mark "Tiffany" as a standalone term" in the absence of modifiers such as "setting," "set," or style." The latter modifiers being standard in the industry and for which Tiffany did not initiate claims against Costco if such modifiers were present.

This case caught my eye as it echoed, on a slightly smaller scale, a trademark and copyright infringement case I settled against Costco in October 2007. In that case, I represented Cao Yong, a world-renowned artist specializing in original oil paintings who is celebrated in the United States, China, and internationally for his unique contributions to both the art world and to the community.

Cao's original oil paintings are reproduced by way of the fine art reproduction method called "Giclée." The approved Giclée reproductions are then hand-embellished by Cao. Once the entire Giclée reproduction is approved by Cao and his sister, the limited edition Giclée reproductions, along with a Certificate of Limitation and Authenticity containing an individual limited edition or artist proof number, are personally signed by Cao. The limited edition Giclée reproduction is then stretched onto a stretcher bar and framed. The limited edition Giclée reproduction is then sold to an approved art broker and/or art gallery.

When visiting a local Costco one day, Cao's sister, came across a counterfeit, low quality reproduction of one of Cao's paintings - complete with a fake signature and Certificate of Limitation and Authenticity. It was determined that the counterfeit was being sold by a third-party vendor who maintained a business relationship with Costco and put on roadshows appearing at various Costco stores to sell artwork including counterfeit Cao Yong paintings. Eventually, the case was settled to the delight of Cao who honored me with a 41" x 76" limited edition archival Giclée reproduction of his painting "Voice of the East" which hangs in my office to this day.

Cao Yong.jpg

Of further note in Judge Swain's Order is her finding that "Costco's upper management, in their testimony at trial and in their actions in the years prior to trial, displayed at best a cavalier attitude toward Costco's use of the Tiffany name in conjunction with ring sales and marketing." Apparently, nothing has changed over at Costco corporate as this was the same attitude encountered by me when I took the depositions of their upper management in Seattle in 2007. Accountability, including corporate accountability, must be practiced along with the recognition of others' ownership rights in trademarks and copyrights.

If someone is not recognizing your ownership rights and is actually infringing your intellectual property, let's talk. I can be reached at 949.825.5590 and/or [email protected].

David A. Berstein is a founding partner of The Myers Law Group where he concentrates his law practice on intellectual property-related litigation and business disputes.

For more information see the The Myers Law Group website at www.mybelaw.com.

To view Cao Yong's world-renowned artwork, go to www.caoyong.us/.

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