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RAPAPORT... Tiffany & Co. sued Costco Wholesale Corporation on February 14 to prevent further sales of what the luxury retailer concluded were counterfeit diamond engagement rings and for damages associated with prior sales at the mass-market club's jewelry counters. Tiffany & Co. also alleged trademark infringement, dilution, counterfeiting, unfair competition, injury to business reputation, false and deceptive business practices and false advertising and sought $2 million per infringement against the defendant. In its answer to Tiffany & Co.'s suit, and by filing its own counterclaim, Costco Wholesale admitted that it sells diamond rings, but with the commonly defined ''Tiffany setting'' (pictured) and has for many years. ''The word 'Tiffany' is a generic term for ring settings, comprised of multiple slender prongs extending upward from a base to hold a single gemstone.'' Attorneys for the defendants argued that the rings sold by Costco were and are unbranded, have Tiffany settings and are ''accurately described as such'' on in store signs. Costco's attorneys added that its rings are sold in plain beige outer gift boxes, as opposed to Tiffany & Co.'s blue box and there were no brand names engraved on such packaging. The warehouse club denied having infringed upon or invaded any legal rights of Tiffany & Co., but asked the court to prevent the jeweler from ever again asserting false claims of its right to exclude use of Tiffany as a generic term for style or type of ring setting. Costco is also seeking court-ordered changes to the federal trademark registration being put forward by Tiffany & Co., being used as evidence against the plaintiff, stating that the term Tiffany setting is generic. The defendant told the court it has never sold ''Tiffany rings,'' which it distinguished from the unbranded rings it sells with a Tiffany setting, and it has never used Tiffany as a trademark for rings, according to the filing. Costco's attorneys also claimed the company did not need permission from the plaintiff either to use ''Tiffany'' as a generic term. Costco stated that if there was an actual controversy, it would become whether Tiffany & Co. has a valid legal right to exclude Costco from using the word ''Tiffany'' to indicate a ring setting. Given that, the defendant seeks to have this case dismissed with prejudice, declared adjudge and a decree that Tiffany & Co.'s evidence is invalid regarding the use of the Tiffany setting and seeks attorney fees plus other equitable relief deemed proper by the court.
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