In 2013, Tiffany & Co. discovered that in some stores of Costco, the American big-box retailer, diamond engagement rings were displayed with a tag bearing, next to the price, the wording Tiffany ring.
Those rings did not come from Tiffany, were not authorised by Tiffany and had no connection whatsoever with the maison. The alert did not come from a legal department engaged in systematic monitoring, but from a customer who read that tag and asked herself a question. What followed was a lawsuit that would last eight years.
A defence that was anything but frivolous
Costco did not deny printing that word. It argued that this was not use of a trademark, but the description of a setting style.
The argument had a genuine technical basis, and dismissing it as a procedural device means missing the case entirely. In 1886, Charles Lewis Tiffany introduced a setting that would change the very way a ring is looked at: six slender prongs lifting the stone above the band, detaching it from the metal and letting light pass through it from every side. That solution took its creator’s name and has since been replicated everywhere, for over a century, entering the everyday vocabulary of jewellery. A master goldsmith in Valenza knows perfectly well what is being asked of him when someone asks for a Tiffany setting, and he is not thinking of Fifth Avenue.
The defence, then, rested on a true circumstance: within the trade, that word does indeed also serve a descriptive function. The question was whether it served that function in that context.
Where the law meets luxur
The question the court had to face is subtler than it seems, and it matters well beyond this specific case: under what conditions does a term stop describing an object and start identifying its origin.
The answer is not found in the dictionary, nor in the intentions of whoever wrote the tag. It is found in consumer perception. The legal test is not what that word means in the abstract, but whether that word, placed on that tag, in that store, next to that price, created confusion. Did someone reading Tiffany ring while choosing an engagement ring think of a setting, or of a maison?
It is a question of fact, not of theory. And in luxury it takes on particular weight, because luxury operates precisely on what the name evokes before the object is even looked at.
The first instance decision
The reversal
The story, however, did not end there. In 2020, the Court of Appeals for the Second Circuit vacated that decision.
Not because Costco was right, but for a subtler and more instructive reason: if consumer confusion is a question of fact, then it must be established at trial, before a jury, weighing the evidence of both sides. Costco had produced material that deserved to be examined, starting with the widespread, century-old use of the term within the trade, and setting it aside without discussion was not correct.
In 2021, the parties reached a confidential settlement. No definitive victory, no definitive defeat. And this is precisely the most significant outcome, for the reason I will give in a moment.
What the case really teaches
Those who resell luxury goods often reason according to a scheme that looks impeccable: if the product is authentic, or at least if I am not selling a fake, I have no exposure.
The Tiffany case shows that the scheme is incomplete. The risk lies not only in the object, but in the language used to present it. An authentic good, improperly described, can generate a liability the object itself did not carry: on a tag, in a caption, in the title of a listing, in a hashtag, in a field on an e-commerce screen that the seller conceived as a product category and the customer reads as an indication of origin.
An authentic good, improperly described, can generate a liability the object itself did not carry.
The Italian framework
I am often asked whether an American case has anything to say to an Italian reseller. The answer is yes, and in certain respects Italian law is even more explicit.
Article 20 of the Italian Industrial Property Code grants the owner the right to prohibit third parties from using the trademark in the course of trade where this creates a likelihood of confusion. For marks with a reputation, a category into which luxury falls almost by definition, protection extends further: use that takes unfair advantage of the distinctive character or reputation of the sign, or that is detrimental to it, is prohibited even in the absence of confusion. This is precisely the Costco scenario, with one clarification worth noting: in luxury, unfair advantage is often the only detriment that really counts, because the name works before the product does.
Article 21 then identifies the space within which resellers believe they can move freely: use of another’s trademark is lawful where it is necessary to indicate the intended purpose of a product, or where it serves a descriptive function. That same provision, however, sets a condition that is systematically overlooked. The use must be in accordance with honest practice in industrial and commercial matters.
Which means that a trademark may be named when it genuinely helps make clear what is being sold, and not when it is used to borrow its shine. Where the line between the two lies is not for the writer to decide. It is decided by the reader.
A final thought
In luxury, a name does not describe: it identifies. Every word placed next to a product is, before being a commercial choice, a legal one, and this holds for a shop window as much as for a listing on a platform or a story on Instagram.
The name of a maison is never an adjective.
