Taking Chanel buttons from the brand’s garments and refashioning them into jewelry runs afoul of trademark law. That is what Chanel argues in a newly-filed complaint, in which it accuses accessories company Shiver + Duke of “misappropriating” its “world famous and federally registered” interlocking “C” monogram trademark and its “Chanel” word mark in order to “create and market costume jewelry that draws and relies on the selling power and fame of the Chanel marks.” 

According to the complaint that it filed in a New York federal court on February 12, Chanel alleges that Atlanta, Georgia-based Shiver + Duke, which describes itself as a “handcrafted modern sophisticated accessory line,” and its founder, jewelry designer Edith Anne Hunt (the “defendants”) are taking authentic “buttons bearing the CC monogram that are not intended for use other than on Chanel’s authorized clothing” and putting them on chains, earrings, and bracelets, which they then offer up for sale for upwards of $100. In promoting and marketing the jewelry on the shiverandduke.com e-commerce website, alongside jewelry that is made from Louis Vuitton and Gucci hardware, buttons, and canvas, the defendants “refer to the jewelry as ‘designer’ and in some instances, have used the CHANEL mark to identify their CC monogram button jewelry,” Chanel asserts. 

“There is no dispute,” Chanel argues, that the defendants’ “use of the CC monogram is intended to trade on the goodwill that Chanel has created in its mark through decades of use and millions of dollars in investments.” At the same time, the famed luxury brand claims that the defendants’ jewelry “does not alter the CC monogram and the jewelry nowhere states that it was created by [the] defendants without the authorization of Chanel.” Instead, the appearance of the CC monogram on the defendants’ jewelry is “no different from the display of the CC monogram on authorized Chanel costume jewelry, and to a consumer there is no distinguishable difference between the appearance of [the] defendants’ unauthorized product and Chanel’s genuine product.” 

And in case that is not enough, Chanel – which says that it generated “revenue from sales of costume jewelry sold under and/or bearing the CHANEL marks from 2015 to 2019 [that] exceeded $300 million” – claims that third-party retailers that have purchased Shiver + Duke’s jewelry “have advertised and promoted the products as Chanel costume jewelry” due to the defendants’ “prominent use of the CHANEL marks” on such jewelry.

Upon discovering Shiver + Duke’s offerings, Chanel says that its counsel sent the company a cease and desist letter in September 2020, but in lieu of halting their allegedly infringing activity, Chanel claims that  Shiver + Duke has “made minor changes to their products and packaging.” For instance, new product packaging that describes Shiver + Duke’s jewelry as “Reimagined” and “Reworked,” and states that the jewelry is an “original design” of Shiver + Duke that is “made from authentic buttons.” 

In terms of the products, themselves, Chanel asserts that Shiver + Duke “have also added SD SHIVER + DUKE markings on the backs of the CC monogram buttons.” 

Such modifications “do nothing to prevent consumers from mistakenly believing that the defendants’ jewelry originates from or is authorized by Chanel” because the “packaging still does not state that the jewelry is not authorized by or associated with Chanel, and the jewelry in the post-sale context conveys only that it comes from Chanel when it does not.” Chanel further claims that in response to its objections, Shiver + Duke “have added a small tag displaying the marking ‘SD’ to their button jewelry,” but “such use is not consistent across the product line.” And even when “the tag is used, it does not negate the primary visual focus of the defendant’s jewelry, namely Chanel’s CC monogram,” and such a tag “does nothing to inform the public that the product was repackaged and repurposed by the defendants without the authorization of Chanel.” 

“Regardless whether [they] use disclaimers, tags or markings to designate [Shiver + Duke] as the manufacturer of the costume jewelry bearing Chanel’s immediately recognizable CC Monogram, in the post-sale context, the mark most prominently displayed on the defendants’ jewelry belongs to and identifies Chanel as the source of the defendants’ products,” according to Chanel. “Further, the defendants’ use of additional [Shiver + Duke] markings does not change the fact that the main source identifying feature of the costume jewelry is the CC monogram, that the jewelry is similar to Chanel’s actual products bearing the CC monogram, and that the selling power of the defendants’ products is based on the fame of the CC monogram.” 

With the foregoing in mind and given the defendants’ allegedly “deliberate intent to ride on the fame and goodwill of Chanel’s trademarks, to profit from the CHANEL marks, and to create a false impression as to the source or sponsorship of the defendants’ goods or to otherwise compete unfairly with Chanel,” Chanel sets out claims of federal and state law trademark infringement and dilution, and unfair competition against Shiver + Duke and Hunt. In addition to potentially causing confusion among consumers as to the source of the allegedly infringing jewelry and “diluting or likely to dilute Chanel’s famous CHANEL marks by harming the reputation of the marks, thereby damaging the good reputation of Chanel and the CHANEL marks,” Chanel argues that the defendants’ “use of the CHANEL marks unfairly and unlawfully wrests from Chanel control over its trademarks and reputation.” 

Chanel is seeking monetary damages, as well as injunctive relief to immediately and permanently bar the defendants from making, marketing, and selling the jewelry – or more broadly, using the Chanel trademark “or any simulation, reproduction, copy, colorable imitation or confusingly similar variation of the CHANEL marks.” 

The case is the latest in a long line of legal actions initiated by luxury brands that have sought to exert control over distribution of goods post-first sale, including by preventing the sale of modified but otherwise authentic goods bearing their trademarks (the Rolex v. La Californienne case, for example, comes to mind) – or here, trademark-bearing parts derived from authentic goods – on the basis that such unauthorized use is both likely to mislead consumers and to cause damage to the brand. 

These cases raise some interesting questions about the bounds of a trademark holder’s rights when it comes to the burgeoning resale market, as well as the role of the First Sale Doctrine, a trademark tenet that generally holds that once a trademark owner, such as Chanel, releases its goods into the market, it cannot prevent the subsequent re-sale of those goods by their purchasers. Put another way, the First Sale Doctrine enables the purchaser of a trademark-bearing product to resell that product – and/or potentially parts of it? – without facing trademark infringement liability.

A successful First Sale Doctrine argument assumes that the subsequently-resold product is not “materially different” from the original, which is, of course, a particularly relevant consideration in cases like this one. (As Seton Hall Law’s David Barnes previously noted in an article on the doctrine, when a trademark-bearing product “has been modified by its buyer is in some way marketed to third parties, however, there is potential for consumer confusion about the source of the good and the article’s qualities and characteristics,” which seems pertinent in the case at hand. “This creates a conflict between the first sale rule, which encourages competition between new and used or modified products, and trademark law’s goal of preventing consumers from being misled.”)

As for the policy concerns behind brands’ enduring attempts to police the use/sale of their products in a post-sale capacity, Yvette Joy Liebesman and Benjamin Wilson wrote an interesting article several years ago, entitled, “The Mark of a Resold Good,” in which they state that “encouraged by the expansion of trademark protection in the courts, mark owners have become increasingly aggressive in policing their marks, often relying on spurious claims of trademark infringement.” They assert that “policies that advance the mark owner’s ability to control all distribution channels would harm consumers and disincentivize competition; manufacturers would have less motivation to innovate and improve their product when they control all distribution of goods beyond their first sale.”

Ultimately, if the case at hand sounds familiar, it may be because Chanel was embroiled in a similar suit back in 2013, albeit instead of filing suit, the alleged infringer beat Chanel to court. A company called Button Jewelry by Val Colbert, faced with threats of litigation from Chanel over its button jewelry, initiated a declaratory judgment action, asking the U.S. District Court for the Northern District of Georgia to declare that it was not running afoul of trademark law by taking authentic Chanel buttons and turning them into accessories. Although, that case ultimately proven to be less-than-informative, as it quietly settled within a matter of weeks of it being filed, with the parties seemingly coming to a confidential settlement behind the scenes, and Colbert scraping her site of all Chanel-branded goods.

*The case is Chanel, Inc. v. Shiver and Duke, LLC, et al., 1:21-cv-01277 (SDNY).

One of the most – if not the most – readily sought-after Cartier bracelet style is held together by two little screws that, when tightened, lock the precious metal bangle on to the wearer’s wrist. According to the nearly 175-year old French jewelry-maker, this gilded bit of bondage is meant “to sanctify inseparable love.” Practically speaking, given the price tags associated with these designs, those start at $4,500 and go up from there, they also “signify high incomes,” as AdWeek aptly characterized the 1970s status symbol-turned-pricey ”millennial must-have.”

When the Love bracelet was first released by Cartier in 1969, the creation of Italian-born American jewelry designer Aldo Cipullo, it swiftly became something of an intriguing purchase for well-to-do consumers, helped, of course, by powerful celebrity endorsements, such as those of couples like Elizabeth Taylor and Richard Burton, and Sophia Loren and Carlo Ponti.” When Revlon executive Frank Shields – father to actress Brooke Shields’ – exchanged Love bracelets with his second wife Diana Lippert instead of rings in 1970, the shift in jewelry gave rise to the question in the media, ‘Will the Love bracelet replace the wedding band?,'” the Adventurine recalls. “Even the Duke and Duchess of Windsor exchanged Love bracelets in the seventies.”

Originally priced at $250 and reportedly sold only to couples, the Love Bracelet design, itself, remains relatively unchanged more than 50 years later – albeit the bracelets now come in three alloys of gold (which can cost upwards of $50,000 in some cases) and are now sold individually. Cartier has also since released a slimmed-down version of the Love bracelet, as well as an array of diamond encrusted options. 

As for, the bracelet, itself, with its two unique C-shaped halves that unhinge to clasp together before being screwed on with the miniature screwdriver included with each bracelet, it still functions in exactly the same manner, and in recent years, that very design has enjoyed a mainstream resurgence of sorts, thanks, at least in part, to a new batch of high profile and highly influential wearers. In place of Elizabeth Taylor and Sophia Loren are Kylie Jenner and Rihanna.

Cartier love bracelet

Love and Legal Protections 

Given the staying power of the Love bracelet, and Cartier’s practice of aggressively protecting its valuable designs, the jewelry company maintains an array of legal protections in connection with it, thereby enabling its legal counsel to police unauthorized attempts to replicate the iconic design, whether it be the hoards of Amazon sellers offering fake Love bracelets for little more than $30 or higher-end jewelry companies doing their best takes on the time-tested classic.

Cartier’s enforcement efforts are founded, to a large extent, on its trade dress rights in the bracelet. A subset of trademark law, trade dress protection extends to the appearance of a product, assuming that such a configuration indicates the source and distinguishes it from other sources. Given the longstanding and consistent use of the Love bracelet by Cartier and the sheer level of fame associated with the bracelet, its design, and its source, Cartier’s trade dress registration for the overall appearance of the Love bracelet not only makes sense (certainly the jewelry company can show that the bracelet maintains to requisite level of secondary meaning in the marketplace), but is a valuable form of protection.

Registered in 1977 and renewed as recently at 2007 (trade dress and trademark protection can, in theory, last indefinitely subject to periodic renewals), this specific registration protects “the overall configuration of a bracelet having a series of simulated screws which encircle the goods and two real screws, which appear at the points on the bracelet where it may be opened” in Class 27. An identical registration was issued in 1985 in Class 28, which broadly covers “amusement and game apparatus” and “equipment for various sports and games.” 

Aside from the trade dress registrations, there are a number of other registrations in the mix for the Love bracelet, as well. For instance, the famed jeweler has trade dress rights in the design of “a jewelry item with a series of simulated heads of screws embedded around the outside perimeter.” Another extends to “a configuration of a simulated head of a screw that is embedded in the goods.” Still yet, Cartier maintains a trademark registrations for a “stylized version of the word LOVE,” which covers classes 14, 18, and 25, jewelry, leatherware, and apparel, respectively. And these are just a few examples of the protections that exist in Cartier’s sweeping Love-centric portfolio.

Cartier: A Vigilant Defender 

Far from merely accumulating such registrations and any common law (i.e., state law) rights in its world-famous bracelet, Cartier actively enforcers those rights. It is, after all, the trademark holder’s duty to police unauthorized uses of its marks in order to maintain the exclusive source-identifying capabilities of its trademarks (and ensure the continued value of those marks, which translates, in many cases, to premium pricing).

In addition to the many run-of-the-mill trademark infringement and counterfeiting cases that Cartier (and almost every other luxury brand) files each year, Cartier has initiated an array of more interesting legal matters in connection with the Love bracelet, and the word “Love,” as well. 

For instance, in early 2014, Cartier took on the World Gold Council in an attempt to prevent the market development organization for the gold industry from federally registering its own “LoveGold” trademarks. By way of an opposition lodged with the U.S. Patent and Trademark Office (“USPTO”)’s Trademark Trial and Appeal Boar (“TTAB”), Cartier argued that the World Gold Council should not be able to register its “LoveGold” mark because it is “confusingly simliar in sound, meaning, appearance, and commercial impression” to Cartier’s “Love” marks and thus, when used in connection with jewelry would “likely cause confusion or mistake or deceive the purchasing public” into believing the two companies’ goods are related when they are not. With that in mind, Carier argued that it would “be damaged by the issuance of a registration for the marks LoveGold.” 

The back-and-forth between Cartier and the World Gold Council before the TTAB continued through early 2015 before Cartier withdrew its opposition, seemingly in light of a settlement between the parties, and following initial approval from the USPTO in 2015, LoveGold’s marks were formally registered in 2018. All the while, Cartier and its parent company, Swiss conglomerate Richemont, were in and out of court in the United Kingdom in furtherance of a bigger fight: a case that would require internet service provider (“ISP”) companies – including defendants BT, Virgin Media, Sky, TalkTalk and EE – to block access to websites offering for sale and selling counterfeit and otherwise infringing versions of its watches and jewelry. 

Unsurprisingly, one of most heavily-targeted jewelry products under the Richemont jewelery umbrella when it comes to counterfeits is Cartier’s coveted Love bracelet. 

Ruling in favor of Cartier and Richemont July 2016, the England and Wales Court of Appeal confirmed a lower court’s finding that ISPs do, in fact, have an obligation to block sites infringe others’ trademarks. The court stated that while the responsibility to identify the offending websites lies primarily with brands, ISPs have a legal responsibility to cooperate in disabling them, thereby sharing the burden of combating the sale of counterfeit goods online with the brand owners. The win was a big one, and the outcome has been deemed a “landmark” victory. 

As for the claims from counsel for the ISPs that its quest to block websites that offer up counterfeit goods “restricts freedom of speech [and otherwise] legitimate activity,” Cartier’s parent pushed back. “This action is about protecting Richemont’s maisons and its customers from the sale of counterfeit goods online through the most efficient means,” a spokesman for the conglomerate revealed. “It is not about restricting freedom of speech or legitimate activity.”

After all, it is those very protections that have enabled Cartier to remain the easily-identifiable source of these coveted bracelets in the minds of consumers. And that level of exclusivity – paired with famous endorsements and oft-out of reach price tags, which do not drop too far below their original retail price on resale sites like The RealReal, which implies enduring demand – plays a signifiant role in how Cartier has been able to continue to sell the Love bracelet, decade after decade.

*This article was initially published in June 2019.

Created in 1968 as a luxurious take on the four-leaf clover, a timeless symbol of luck, Van Cleef & Arpels’ Alhambra jewelry collection is among its most well-known offerings. “The first Alhambra design was an opera-length necklace punctuated with 20 clover-shaped motifs crafted with the design’s signature beaded edges,” according to Sothebys. “As the 1960s made way for the 1970s, the design became hugely popular among celebrity clients, who layered many Alhambra necklaces of different sizes and with different gemstone combinations for the quintessential daytime look.” 

American actress-turned-Princess of Monaco, Grace Kelly was among some of the “long-time devotees of Van Cleef & Arpels and collectors of Alhambra necklaces,” further helping to put the design on the map, one that has endured in popularity for more than five decades. In furtherance of such longstanding appeal and in light of the fact that the Alhambra line has (arguably) come to indicate a single source, Netherlands-based Van Cleef has sought legal protections for it across the globe, with one ongoing trademark quest – a back-and-forth in China – proving to be particularly interesting. 

On November 19, 2014, Van Cleef filed an application with the Chinese Trademark Office for a three-dimensional trademark (no.15736970) for its specific clover motif for use in class 14 on goods, including “watches; rings; bracelets; earrings; necklaces; jewelry; [and] watch cases.” Less than two years later, in January 2016, the Chinese Trademark Office gave the application the go-ahead, and issued a registration to Van Cleef for the little clover symbol. 

Ultimately, the registration would not prove to be without issues, as in April 2018, a Chinese citizen named Qingyu Bi initiated proceedings with the China National Intellectual Property Administration (“CNIPA”) seeking to have the trademark registration invalidated. According to Bi’s filing, Van Cleef’s clover lacks the necessary distinctiveness to be registered, and in July 2020, the CNIPA agreed, determining that because the consuming public is unlikely to easily identify the source of the motif, it is not capable to distinguishing the products of different companies. In other words, the little clover fails to function as a trademark. 

Handed a loss by the national trademark body, Van Cleef took its case to the Beijing Intellectual Property Court on the basis that the clover mark is an original design created by – and associated with – Van Cleef in part because it is different from other jewelry items in the market, and that Van Cleef has been actively using and promoting the clover mark over a long period of time, thereby, giving rise to trademark rights. 

Much like the CNIPA, the Beijing Intellectual Property Court sided with the CNIPA. According to the court, the clover symbol – even if it is an original creation of Van Cleef – is easily identified as the shape of (or part of the shape of) the jewelry product as a whole in the minds of consumers, thereby, making it difficult for the clover to readily identify and distinguish the source of product.

The court was similarly unpersuaded by the evidence that Van Cleef produced to demonstrate its widespread marketing and advertising of the specific Alhambra clover in the Chinese market, and held that even if the brand has heavily promoted the clover mark, it “cannot prove [its] use of the [clover] pattern is trademark use,” thereby, weighing against Van Cleef’s assertion that the symbol has acquired distinctiveness in the market. 

In response to yet another loss, Van Cleef has further appealed to the Beijing High People’s Court, where the case is currently underway. 

The matter is striking, according to HFG Law & Intellectual Property attorneys Ariel Huang and Chunyan Zhang, who claim that Van Cleef’s “four-leaf clover” jewelry is, in fact, “quite famous in China,” but despite such fame, the symbol has, nonetheless, been rejected as a 3D trademark to date. 

As for how brands can effectively create 3D marks that meet the requisite threshold of distinctiveness for protection in China, Huang and Zhang say that “the answer lies in two aspects: 1) making sure that the trademark itself is distinctive in nature; and 2) if it is not inherently distinctive” – which is commonly the case when a mark is a 3D one – “collecting sufficient evidence to prove its acquired distinctiveness.” 

“Lacking inherent distinctiveness does not mean absolute impossibility in obtaining a registration for a 3D trademark,” they note. For marks that are not inherently distinctive, such as those that are three dimensional, a brand’s ability to succeed in registering and maintaining a registration will depend on its ability to produce evidence showing that “the relative public [view] the pattern as a sign indicating the source of the products” at issue. 

Evidence that is “normally useful” in such situations includes “overseas or domestic registrations as proof of distinctiveness; use of the trademark in the prior three years in commerce in China; actual evidence of distinctiveness, such as market survey reports,” according to Dechert LLP’s Jingzhou Tao and Yingying Zhu

Unfortunately for Van Cleef and other brands seeking rights in 3D marks, the situation becomes more complicated when the shape at play forms part of the relevant product, such as the charm on a necklace. Citing Article 9 of the Chinese trademark act, Huang and Zhang state that “if the relative public [views] the pattern merely as (part of) the shape of the product as a whole rather than as a trademark, the pattern will not serve to distinguish the product [upon which it appears from those of others] and thus, will not be deemed as a trademark” without a showing of secondary meaning. 

As such, the trademark applicant will need to produce “sufficient evidence to prove it has acquired distinctiveness through use.” 

Depending on whether the evidence submitted by Van Cleef will enable the clover to be considered “trademark use,” the jewelry company may follow in the footsteps of Ferrero Rocher, which was ultimately able to convince the Chinese trademark office to register the colors and the packaging of its famous chocolates as a 3D trademark, but only after a protracted legal battle. And even if the brand is not successful on the trademark front (and it very well might not be given the “much stricter and more abstract [requirements at play for 3D marks] than the criteria applied for word marks or logos”), Huang and Zhang state that Van Cleef is not entirely unprotected, as it “has different design patents granted in China, including the Alhambra series.” As such, even if the trademark case is not a success, “it will cause a big storm for the brand within the life of those design patents.” 

The U.S. Court of Appeals for the Second Circuit sided with Costco in the years-long legal battle that it has been ensnared in with Tiffany & Co. In a highly-anticipated decision dated August 17, a 3-judge panel for the Second Circuit held that the U.S. District Court for the Southern District of New York erred in determining on summary judgment that the multi-national warehouse retailer ran afoul of federal trademark law by labeling and selling diamond engagement rings as “Tiffany” rings, and ultimately, requiring Costco to pay a jury-determined $21 million damages sum as a result. 

In the newly-issued 3-0 decision, Circuit Judge Debra Ann Livingston states that the lower court was wrong to grant Tiffany’s motion for summary judgment, and thereby, prevent a jury from deciding key issues at the conclusion of a trial.

An Early Win for Tiffany

Tiffany & Co. first filed suit against Costco on February 14, 2013, accusing it of trademark infringement, counterfeiting, and unfair business practices, and seeking tens of millions of dollars in damages. According to Tiffany’s complaint, Issaquah, Washington-headquartered Costco had sold engagement rings – some costing upwards of $6,000 – using the “Tiffany” name to thousands of Costco members, who snatched up the sparklers (allegedly) under the false impression that they were authentic Tiffany products. Costco responded with a countersuit, in which it denied infringement/counterfeiting liability, asserted defenses – including fair use – on its behalf, and sought to have Tiffany & Co.’s federally registered “Tiffany” mark invalidated on the basis that it is generic.

In September 2015, Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York found that Costco was liable for trademark infringement and counterfeiting for using signage bearing the word “Tiffany” to identify certain rings in its stores, and confusing consumers as a result. “Based on the record evidence, and despite [its] arguments to the contrary,” Judge Swain held that “no rational finder of fact could conclude that Costco acted in good faith in adopting the Tiffany mark.” At the same time, Judge Swain also dismissed Costco’s counterclaim and its defenses, including its claim of fair use.

As the Second Circuit stated in its decision on Monday, while “Costco does not dispute that Tiffany has a valid, registered trademark for the word ‘Tiffany,’ it argued before the district court that it was using that word in a different, widely recognized sense to refer to a particular style of pronged diamond setting not exclusive to rings affiliated with Tiffany.” With that in mind, and given its assertion that “Tiffany” is “not only a brand name, but also a widely-recognized descriptive term for a particular [ring] style,” Costco argued that its use of the Tiffany name “was not likely to confuse consumers – the essence of a claim for infringement – and that even if some degree of confusion was likely, it was entitled under the Lanham Act to [make] descriptive use of an otherwise protected mark.”

With the district court deciding the matter on summary judgment (i.e., a judgment entered by a court without a full trial when there “are no genuine disputes concerning any material facts”), and holding that Costco’s conduct amounted to “gross, wanton or willful fraud,” with the retailer specifically requesting that its vendors copy Tiffany products, which it then sold in its stores, the jury was ultimately tasked with deciding only the amount of monetary damages owed to Tiffany by Costco as a result of its alleged infringement and counterfeiting.

On the heels of the lower court’s decision, Costco sought Second Circuit intervention in September 2017, arguing that “the district court erroneously granted Tiffany’s motion for summary judgment on its infringement and counterfeiting claims, improperly depriving [it] of the opportunity to present its case to a jury.” In particular, Costco argued that “Tiffany” is not a legally-protected trademark but instead, a generic term short for “Tiffany setting,” which describes a specific ring setting for a diamond solitaire situated among six prongs. With that in mind, Costco argued that it used the name in a non-infringing way to “describe” a certain style of ring, and not to identify the specific source (or brand) behind the rings, themselves.

Beyond that, Costco contended that its use of signs bearing the word “Tiffany” to identify the multi-pronged solitaire diamond rings it was offering was not enough to give rise to counterfeiting liability, as the Costco rings had non-Tiffany trademarks on them, were sold to consumers in non-Tiffany packaging, and came with non-Tiffany paperwork. This did not meet the high bar required for a finding of counterfeiting, it asserted in the lengthy appeal filing.

The Second Circuit’s Decision

In its decision on Monday, the Second Circuit held that the district court got the matter wrong on the basis that it is reasonable that jurors could conclude that Costco’s use of the “Tiffany” name in connection with the sale of six pronged diamond rings is not likely to confuse consumers or lead them to believe that Tiffany & Co. endorsed or was in some way connected to the sale of the rings.

To be exact, the appeals court “conclude[d] that Costco’s evidence has, when considered in the aggregate, created a genuine question as to the likelihood of customer confusion,” namely due to “the combination of (1) Costco’s evidence that ‘Tiffany’ is a broadly recognized term denoting a particular style of pronged ring setting and (2) its further indications, backed by prior pronouncements of this court, that purchasers of diamond engagement rings educate themselves so as to become discerning consumers.”

In other words, “A jury could reasonably conclude that consumers of diamond engagement rings would know or learn that ‘Tiffany’ describes a style of setting not unique to rings manufactured by Tiffany, and [could] recognize that Costco used the term only in that descriptive sense.” Moreover, the court held that “such consumers may also be distinctly capable of recognizing that Costco’s rings were not manufactured by Tiffany – based, for example, on their price, place of purchase, packaging, or paperwork – and consequently be particularly unlikely to be confused by any aspect of Costco’s point-of-sale signs.”

The Second Circuit also asserted that a jury could reasonably conclude that Costco did not use the term ‘Tiffany’ as a trademark.” After all, “Tiffany’s own evidence indicates that Costco typically identifies the trademark associated with its branded products as the first word on the product label,” while Costco provided evidence that by way of “over a century’s worth of documents [that] suggest that ‘Tiffany’ – both alone and in conjunction with words like ‘ring,’ ‘setting,’ ‘style,’ or ‘mounting’ – is widely understood to refer to a particular type of pronged diamond setting.”

Ultimately, the appeals court found that a factual dispute exists in terms of whether Costco’s use of the word “Tiffany” was merely descriptive and used to refer to a type of ring setting, thereby, falling within the bounds of fair use … or whether its use was infringing, and thus, held that the case should not have been decided without a jury trial on the merits. As a result, the matter has been remanded to the district court for a new trial.

In a statement on Monday, Tiffany & Co. Senior Vice President, Secretary and General Counsel said, “We are disappointed in the Court’s ruling, which finds that a jury, rather than the judge, should have decided the question of liability in the first trial. We continue to believe that the District Court was correct in its findings, and that the jury’s finding on damages, which resulted in a $21 million award for Tiffany & Co., is a clear indicator of the strength of the Tiffany brand, and of the jury’s outrage over Costco’s actions.”

She further stated, “We have no qualms about trying this case again, and remain confident that a jury will find counterfeiting and infringement upon retrial, just as the District Court judge originally ruled.”

*The case is Tiffany & Co. v. Costco Wholesale Corp, 17-cv-02798 (2nd Cir.), 1:13-cv-01041 (SDNY).

A nearly $1 million pink sapphire and diamond bracelet from Tiffany & Co.’s 2016 Masterpieces Collection is at the center of a newly-filed lawsuit. By making and selling the bracelet, and presumably, others like it, Thailand-based jewelry company Jacob’s Jewelry Co. (not to be confused with New York-based jeweler to the stars, Jacob & Company) claims that Tiffany & Co. of infringing its exclusive rights in a utility patent for a “Color Changing Multiple Stone Setting.” 

According to the complaint that it filed in a New York federal court late last week, Jacob’s Jewelry Co. asserts that since 2017, it has maintained a utility patent that covers “a multiple stone setting” in which the stones are positioned in such a way that when “the viewing angle of an observer changes, [the color of] each of the [stones] changes.” The invention, according to Jacob’s Jewelry, “may be useful to create articles of jewelry, as well as to enhance objects and designs of various natures.” 

And useful it has been for Tiffany & Co., Jacob’s Jewelry alleges in its complaint, arguing that the 182-year old jewelry stalwart sells color-changing jewelry – including the aforementioned bracelet, which was designed by the brand’s former design director Francesca Amfitheatrof and constructed by its “master stonecutters and setters” – that is “constructed according to the teachings of the patent claims in [its] patent, without [its] authority,” thereby giving rise to claims of patent infringement.  

In a back-and-forth between the two companies’ counsels, Jacob’s claims that Tiffany “has not denied the accused products infringe [the patent at issue],” but has, instead, insisted that the patent is invalid, meaning that its jewelry is not infringing. 

The problem with the patent, according to Tiffany? The “relevant” claims are “invalid in view of certain prior art,” namely, a Cartier Tourmaline brooch, which dates back to the 1940s. In other words, Tiffany & Co. has seemingly challenged the novelty of some of the claims that Jacob’s makes in its patent. This is significant, as patent claims as subject to a strict novelty requirement, which means that an invention cannot be patented if certain public disclosures of the invention have been made – or the invention was described in a printed publication or was in public use –  prior to the filing of the patent application. 

Tiffany & Co. color-changing bracelet

Here, Tiffany is allegedly asserting that at least one of the claims in Jacob’s Jewelry’s patent was known to the public – due to the Cartier brooch – and thus, it is off the hook. 

Counsel for Jacob’s Jewelry contests Tiffany’s position, of course, arguing in its complaint that “contrary to [Tiffany’s] allegations, the Cartier Brooch does not contain the relevant features and elements of any of the claims of [its] patent,” meaning that the patent is “therefore, being willfully infringed by [Tiffany’s] sales of the accused products since the date of issuance of [Jacob’s Jewelry’s] patent” in 2017.  

The company goes on to assert that despite being “fully apprised of and … cognizant of the ongoing infringement,” Tiffany has “taken no action to cease its knowing infringement of the patent,” and as a result, has caused Jacob’s “irreparable harm and damage.” 

In addition to a formal declaration from the court that its patent is “valid and enforceable,” Jacob’s is seeking injunctive relief and monetary damages. 

Tiffany & Co. has not yet formally responded to the suit, it will almost certainly – based on its alleged arguments thus far – seek to formally invalidate the patent at issue, a move that would enable it to escape infringement liability, and continue to sell color-changing jewelry of its own. 

*The case is Jacob’s Jewelry Co., Ltd. et al. v. Tiffany and Co. US Sales, LLC, 1:20-cv-04291 (S.D.N.Y.).