Trademark Damages Can Be Substantial

Most people think you can only get equitable relief with TM infringement.

Recently, a Southern District of New York jury awarded punitive damages of $8.25 million to Tiffany & Co. where Costco was wrongfully selling rings labeled “Tiffany” at its stores.  This award is on top of the $5.5 million in damages the jury awarded on September 29, 2016 based on Costco’s profits. That's nearly $14 million.

Tiffany filed the suit in 2013, claiming federal violations as well as state unfair competition laws.  Costco said the TIFFANY mark was invalid because it has become generic for a particular type of ring setting.  Nope, late last year U.S. District Judge determined Costco’s use of “Tiffany” on ring labels caused consumer confusion.

Punitive damages are not available under federal trademark law,  but the Lanham Act contains a treble damages provision to increase awards in certain circumstances.  Because, the jury was able to base its award on New York state law, which does allow for punitive damages where a defendant’s conduct constitutes “gross, wanton, or willful fraud or other morally culpable conduct to an extreme degree,” plaintiffs walked away with a major win. Tears were likely shed at Costco.