Tiffany and Costco Settle Over Fake 'Tiffany' Rings

most storied jeweler in the country. The name alone evokes images of Audrey Hepburn in a black evening gown looking into the window of the famous Fifth Avenue store in breakfast, to Tiffany's and flawless diamond engagement rings in the iconic Robin Egg Blue box. Different images are evoked by the name Costco Warehouses bulk sales of household staples and deals for members only. So happens when Costco starts selling diamond

engagement rings using the word Tiffany Well. Tiffany sues for trademark infringement, and an eight year legal battle follows until this week, when Tiffany and Costco reached a settlement. My guest is intellectual property litigator Terence Ross, a partner at Captain Eugen Rosenman. Terry tell us about the legal dispute. So Costco was selling engagement rings that featured what is often referred to as a Tiffany setting, and by that they mean the diamond is raised above the ring band

in sort of an attractive setting. It was something that was created by the founder of the Tiffany Shane gentleman by the name of Charles Tiffany, and so it has been known for over a hundred years as the Tiffany setting, and Costco advertised their engagement rings as featuring a Tiffany setting, and Tiffany the jewelry store of ject to that in the Bottle lawsuit back in two thousand thirteen, and Costco claimed that the word Tiffany had become a generic term.

This actually went to a jury who came back with a huge verdict. Tell us about the trial judges ruling. So the judge in the district Court granted summary judgment of liability against the Costco and in favor of Tiffany, holding that the use of the Tiffany trademark constituted both trademark in infringement and counterfeiting. Counterfeiting is fairly serious finding under the Landom Act, but did not make any finding with respect to the damages for those violations of the

Landom Act. So a jury trial was held specifically to determine damages. So at the start, the jury is told that Costco has already been found libel for trademark infringement and counterfeiting, an now it's up to you, the jury, to determine how they should be punished with respect of monetary damages. And that jury awarded twenty one million dollars to Tiffany or this counterfeiting and trademark infringement, it's appealed to the second Circuit, and the second Circuit reverses. Why

did the second Circuit reverse? So? The Second Circuit felt that the judge had overstepped her function by granting summary judgment. The Second Circuit felt that there were genuine issues of material fact that had, as a matter of law, to be presented to the jury to decide and could not be decided by the judge. And fundamentally, what this means is the Second Circuit felt that a reasonable juror might have thought that the use of the term Tiffany referred

to the setting and not to the jewelry store. In other words, that the ring did not originate from the Tiffany Jewelry store, but rather referred to the type of setting for the engagement ring, and it was up to jury therefore make the decision, and the judge overstepped her bounds by making the decision for the jury. So Tiffany has always defended its brand zealous lee. Did it surprise

you that they decided to settle with Costco? It did, but the stakes were much higher on the retrial coming back from the appellate court, and that new trial in front of a jury was set fruit was coming October. At that point, it is possible that a jury could have returned a verdict in favor of Costco, which in

essence meant that the term Tiffany had become descriptive. And at that point, if that finding were upheld on appeal, Tiffany's very valuable trademark would have overnight become, if not valueless, close to valueless, in that any retailer using that particular type of setting for an engagement ring could then advertise

using the Tiffany trademark. So it was very high risk situation for Tiffany at that point, with very little reward, and so it made perfect sense to choose to settle, especially if Costco had agreed to stop using the term Tiffany, but doesn't it still leave open then the question of whether or not a jeweler can use the term Tiffany setting it absolutely does leave that decision open. But that's one of the things that Tiffany probably wanted to get

out of the settlement. Now, the funny thing about trademark settlement June is that you can call them confidential, but by looking at the practices of the defendant sometime after the settlement, you can pretty much figure out what settlement was. So now if you go into a Costco store and you no longer see the word Tiffany being used in connection with their engagement rings, you can pretty much be assured that the settlement agreement required them to stop using

word Tiffany. And if that's what the settlement was, then I think it was a good deal for Tiffany. And the reason I say that is Tiffany continues to have leverage over anybody wanting to use the Tiffany name, Whereas if they've gone to trial and they've lost, they would have lost all leverage against these other companies in the marketplace. As long as there's this possibility that the Tiffany mark cannot be used in any use would be counterfeiting or

trademark infringement. Then that gives you a pretty big stick to wield, as the lawyers trying to enforce the Tiffany trademark. Tiffany switched law firms on the matter a month ago. Could that have made a difference. It certainly is interesting timing. Sometimes by changing law firms like that, you get a

different perspective on where you stand. It is from time to time possible for a law firm that has been fighting it out day to day in the trenches to develop blinders so that they've got just mono vision and they can see no path forward except through litigation. Whereas you bring in a new firm looking at the situation afresh, and they might come up with a different solution that gets the client where they want to go. You see

this quite frequently in the trademark areas. Trademark is one of these funny areas of law where both clients and lawyers can become irrational because they're personally attached to the trademark. And here it is not just any trademark, It is the name of the founder of the company, Charles Tiffany, and so you often see irrational decisions going on. This lawsuit has been going on since two thousand thirteen. That's

eight years. That's phenomenal for a trademark lawsuit and tells you a lot about how personally the parties took the litigation, and that probably spilled over to the lawyers and bringing him new lawyers to look at things fresh probably helped Tiffany a lot. There have been so many brand names that were trademarked that went on to become generic terms because of their popularity, asked for an escalator, taser, just to name a few. What can Tiffany do to stop

that from happening to its trademark? I think in this situation it's a very challenging legal problem for Tiffany. The need to continually police the mark, which is the phrase we use in trademark law, is ongoing. It's continuing. You do not have to sue every single person who uses the word Tiffany, but you do have to show a regular pattern of chasing after people who are infringing the mark. And this is what Xerox has done so well for

decades and decades now. And although we as late people may sometimes think of Xerox as having become genericized in the law, it really has not because of the enforcement actions Xerox took Tiffany's. In the same mind here, it's going to have to constantly police this mark in order to preserve it. Whether or not they have to engage in this sort of multimillion dollar legal fee litigation lasting eight years is probably overkill. But this one sort of

got away from them. I assume they thought at the outset Costco would back down and it could be settled relatively quickly, but it did not. Then Costco did not, and you can sort of see why. I mean, Costco is trying to sell engagement rings. If the guy comes home from Costco and shows his fiance this lovely engagement

ring that's branded a Tiffany setting, that's one thing. If he comes home in a Costco both, I mean, could you imagine I'd love to see the face of the bride when she told that her diamond engagement ring comes from Costco. That little extra branding from Tiffany really helps. And so there's gonna be a constant temptation in the marketplace for people selling diamond engagement rings to try to use the term Tiffany and then point to the setting

of the diamond as allowing them to do so. So Tiffany scored beyond a continuous pressure to defend this mark. We don't know what will happen in the end, but it scored to be a costly exercise for Tiffany. I have to say, in researching this, I was surprised at some of the names that I thought were generic that were actually brand names and trademark to start out with,

like Kleenex, Taser, and even TV dinner. It's an interesting part of branding in general is that you are the first to market with a product and the trade name you assigned to the product is so appropriate that you actually put it at risk of becoming generic. Sized. Aspirin is the classic example of this. It was the only product like that at the time, and people simply started referring to headache medicines as aspirant. Same with tissue paper.

They were relatively quick to the marketplace with this concept perfect trade name, and people started using as we tend to do in a geneer sized way. Tiffany is a little bit different. It is a subset of the consumer world that buys engagement rings, and I think it's a little bit harder to make that an allergy to clean X or aspiring xerox. But that said, from having done a lot of jewelry cases over the years, you do hear the people who are knowledgeable about this area always

referring to that setting. Setting fascinating is always terry. Thanks so much. That's Terence Ross of Captain uten Rosenman. Carry Dunn spent decades at the very tomp of the New York legal profession, making millions of dollars defending Wall Street banks and global corporations. The sixty three year old was a senior partner at Davis Polkin Wardwell, one of New

York's most prestigious and profitable law firms. But the sixty three year old decided to leave his elite law firm to return to the Manhattan District Attorney's office, where he had his first job after law school, and as Manhattan District Attorney Cy Vance's general counsel, carry Dunn may have found the biggest case of his career investigating former President Donald Trump and his company. Joining me is Greg Farrell bleu Burke, Legal reporter Greg described the kind of work

he did at Davis Polk Carry done. He spent three years as a baby prosecutor, an assistant district attorney under the legendary Robert Morgan Thau, from which is where he met another baby prosecutor at that time, Cyrus Vans Jr. And then left in to take a position at Davis Polk. He interviewed with Robert Fisk Jr. Who's a legendary figure

in his own right. Bob Fiske was the U S Attorney for the Southern District during the Clinton administration and then became He's not as well known as the other white Water Water prosecutor, but he was the first special counsel or independent council appointed to investigate President Bill Clinton's role or whatever his connection was with the dubious real estate transactions that became to be known as Whitewater and Um. Eventually he was replaced by Ken Starr, and we all

know how that movie ended. Uh So, anyway, Bob Fiske. One of the interesting things about Carry Dunn is when he said this in a testimonial to Fisk or when he was given an award a few years ago, that just while he was interviewing with Fisk. He thought, if they offered me a job, I want to take it. I want to work for this guy and do whatever he wants me to do. This is back in and it became almost a thirty year career at David's Polk. Was he a litigator there is from like Davis Polk,

I take a give a lot of corporate clients. Yes, very much so. And right it's one of the largest you know, corporate's big law the definition of big law, a huge law firm, A lot of corporate work for Wall Street banks as well as just large global corporations, and done worked his way up. What I found interesting about him is he didn't become necessarily a star litigator, the guy you want in the courtroom for the big case.

He did that, but a search of his pacer court files and hopefully the listeners understand what that is just a TikTok of the cases he was involved with and appeared in court. Was fairly heavy in the ninet nineties, but started petering out in the early two thousand's when he became like a managing partner and started devoting more of his time to managing the law firm. It was also during that period in the late nineties where he devoted a lot of his time to efforts that were

not billable hours. Bob Fisk, you know, was appointed to lead a commission in the nineteen nineties to clean up the mess, or at least two come up with a solution to the problem of courts being basically overrun with drug crimes and like, as you remember, the nineteen nineties was a terrible time in the country, but particularly in

New York City for drug crimes. And so when you talk about drug crimes, you have a wide variety extending from notorious bad actors and traffickers who kill people and are involved with cartels and need to be tried in the federal court system or in the state court system and put away for a long time, all the way down to you know, sad cases of people who were addicted and then you know, break into a car and steal the radio so they can get their hundred dollar

fixed that night. And you know, the system in the lumped them all together, and the devised under Bob Fift's direction carry done was his basically his general counsel for that wrote a report suggesting the creation of a whole new tier of courts UH for these low level basically sad addicted case offenders, so that they could, instead of being thrown in jail, could be given if you know, they passed, you know, muster, basically the opportunity to come clean,

beat their habit, and return to you know society as you know, productive you know people and UH and not have to go to jail for ten years because they did something really stupid when they were high. And this became very successful at relieving the burden on the New York State drug system of all huge amount of these

cases that were clogging the system. And also just in terms of doing a good thing, basically separating people who did not need to be put away from many years and allow them a chance to redeem themselves and clean up their act. And it became a model from any other states to pursue. So carry Dunne was instrumental in

basically putting this paper together. The judge who asked Fist to to do this with so impressed by done that she named him to a couple of subsequent commissions, one of which was aimed at providing legal services to so called indigent people. Now we all know that if you are accused of crime and you're poor and you have no access to a public defender will be appointed to

represent you. That's criminal. There's like so many cases, civil cases where somebody's been wronged or accused of something and they can't afford like a real lawyer, you know, so they represent themselves and of course lose because they don't even know what they're doing in court. And carry Done headed up a commission that sort of came up with a solution of providing free legal services to people who didn't couldn't afford so the least they could get some

professional representation in court in a civil case. So that's yet another example of what he did to sort of like improve the court system in New York. Those are not buillable hours. That's stuff that doesn't care. And at one point he was president of the Manhattan Bar Association. So I spoke to retired judge Ry Caymans, who had served with carry Down on some of these uh and and helped out significantly on some of these commissions. And because I'm not a lawyer, and I thought, well, why

is it a big deal? Every biographical sketch of carry Dunn says he you know, president of New York City Bar, and he said, no, that's significant because of how much time and effort he put into improving the system, uh to you know, basically good causes that for him, as a senior corporate lawyer to take this on and throw himself at that and continue some of the work he

was doing is significant. Judge Cammons told me that he you could look at Carry Dunn as a guy who had three careers, first as a prosecutor, second as a corporate litigator, big money you know, representative for you know, Wall Street banks and global corporations, but finally as head of the New York City Bar, and as someone who basically for the industry of lawyers in New York really

contributed a tremendous amount of time and energy. Dunn has been recognized, you know, and given awards for all the amount of time and eff he was put into pro bono work. Um, but that's something that someone like me who writes about this stuff for Bloomberg News, it was not on my radar screen. I write about, you know, the companies and the banks that get charged with something and who defends them, etcetera. So this is a significant part of his career, and now he's come full circle.

He's back, you know, working with the prosecution team in what could eventually be like the most significant case of his life. What I found interesting is that he said that his proudest moment was not all his Wall Street work, but his pro bono defense of a Bronx residence. Yes, that's right. So there was a murder in Brooklyn in the summer of two thousand one, and a guy named Lonnie Jones was identified by an eye witnesses, you know,

someone who shot like a gang leader or something. And it went to trial and this you know, key government witness testified against him, bang bang bang guilty, you know, and then sent away. A group of Davis Polk lawyers and every large law firm has people dedicated to pro bono work, and a couple of them, including someone who's

now a senior official. Justice Department, concluded that, you know, this key witness was lying and that there were a couple of other witnesses who had not been contacted who could refute that testimony. And so they basically won the right for retrial to get the original conviction thrown out. And at the retrial, uh, they brought in carry Donne, you know, again, a senior trial lawyer at Davis Polk

to do the arguments. They didn't do it themselves. And you know, he did it effectively and won an acquittal. And he said he told the Village Voice this. There was a great story in the Village Voice from you know, fifteen years ago on this, and he said that, no matter what I do, this will probably be the most important thing I ever did as a lawyer. It was very a very touching remark for a guy who has yes,

made millions of dollars whose corporate work. So his demeanor was described as mild mannered, but Judge Caman said that he has tremendous charisma. I guess the mild manner description and I talked about this with my editor. So much is more like um. In response to the Trump organizations, lawyers, I think quite rightfully are trying to make the case that this is a political you know, elected Democrats in

New York state of going after the president. So they're trying to cast doubt on the veracity or the legitimacy of the charges and instead of engaging, and this is

to the Manhattan District Attorney Cyrus Vance Junior's credit. Instead of engaging them directly or having a press conference outside the courthouse to fight back at them, he's taken a guy who's really perceived a political you know, made some modest contributions to Democrats over many years, but not many He's not a big political player, and a guy who's not likely to get hot and bothered and angry and fight back fire with fire like a cable TV talk

show host or something. So I think that's what the mild management and unflappable. And you heard that in the Supreme Court argument that he did. He was unflappable, but very convincing. His tone was moderate. So and actually the Supreme Court thing is is hugely significant. Um as you know, there are not one, but two visits to the Supreme Court because the Trump organization, again exercising his rights, you know, fought the idea of allowing a grand jury to subpoena

the now former president's tax records. And think about this. You've got Donald Trump's lawyer, j Secalo, and and also you know Noel Francisco of these as a listener General's Office of the U. S Government arguing that you know, you what you could end up doing. If you allow the Manhattan District Attorney to do something like this, you could basically empower all twenty county prosecutors across the country to go, you know, reek mayhem on any president, including

Joe Biden now or something. So, uh, they introduced this worst case scenario, and the Supreme Court justices, you know, take that seriously, and so you could have you know, Vance himself standing up there. You need someone from the office. Sometimes people who don't have a lot of experience, parties that don't have a lot of experience at the Supreme Court engage a professional, you know, lawyer like Walter Dellinger when we quote in the article, who has lots of

experience arguing before the Supreme Court. But Vance, to his credit, made the right to acision. It had to be someone from his office making this argument, and it could have been a line prosecutor. But a line prosecutor is always already committed to a case. When you're a prosecutor and you've gone this far, there's a certain amount of investment,

uh in this. Someone like done and all the work he's done for legal reform in New York State is not someone who could be described either as a partisan elected official or a prosecutor who's so dug into a case that he can't see the bigger picture. He was actually the perfect guy to put in front of the Supreme Court. And even though he never argued before the Supreme Court before, he was very well briefed by the team, you know, and was able to engage with the justices.

And here's another thing that when you're appearing before the Supreme Court, particularly for the first time, uh, it's not uncommon for lawyer's you know, to start overacting because this is like the Super Bowl and they're they're on the field and you've got the nine justices right there. Although I think it was a zoom call, but you know what I mean, there's still that like high pressure of like, oh my word, I'm right here in front of the

Supreme Court. So that can affect not in a good way your presentation, because you tend to be more valuable or overly demonstrative. And if you listen to carry Dun's presentation was, you know, it was as though these were just nine local New York State judges whom we had known. He was very direct, listened to them, respond to them, to not start like bloviating about you know this, he was impressive and the opposite of Seculo. So Seco does what he does, and he does it well. This was

a very different approach. Yes, so he's in this law firm where he's basically can do whatever he wants, right, he's a senior partner. So why does he decide to is he taking a leave? Is that what it is from? No? I think he decided first of all, you know, like in investment banks as well, at a certain point in law firms, you know that you don't keep holding these full time, highly paid jobs forever. At a certain point,

you know, you become the senior part or whatever. But Bob Fisk himself, who's aged ninety, is still attached to Davis Polk. But of course he's not in there working all the time, but he's know, so there's a way of sort of you know, stepping back from the firm. And he had known Si Vance Junior for a long time. And Vance was beginning his third term as district attorney. And it's it's normal every four years for the senior staff of an elected official like that to turn over.

And you know, after his first term, the first General Council step down, and after the second term, the second General Council step down, and he tapped carry down. And I think I don't know this, but it certainly appears as though he was ready for a new challenge. He'd done everything he could do, uh the law firm, he'd already given back a lot through the New York City Bar Association. And here's you know, somebody's known for a

long time who asked him to be general Council. Literally, did he know who's about to step into like this cauldron, not just this case about the Trump organization, but Harvey Weinstein two point oh yeah. He started in January seventeen, but he agreed and the press release went out like November two and other words, before the election when most people thought Hillary Hillary Clinton was going to going to win.

He accepted the job. So, um, this investigation didn't really begin until, you know, the whole business with Michael Cohen and the payment to the porn stars and the federal case which revealed that the Trump organization, at least in the instance of Michael Cohen and Storm McDaniels, had kept inaccurate books and records, presumably for the purpose of disguising you know what, this money was being paid to Michael Cohen when a factor was because you know, Michael Cohen

had paid money out of his pocket to this adult film actors. So Cyrus Vance is leaving at the end of the year. Alvin Bragg, the Democratic candidate for Manhattan d A, is on track to take his place, assuming he wins the election. Will done stay or go? He's been with Vance now for this will be his fourth year. And yes, since Vance is leaving at the end of the year, the question is whether or not he'll stay

because he's Vance is guy. He's not like a career professional in the office, so it'll be interesting to see thing. Because he holds the title of general counsel, Alvin Bragg I presumed one his own general council. However, Bragg has stated publicly, because he's been asked about this, that he

has no plans to change the team. You know, he doesn't, and that's a wise thing to say, Like you wouldn't broadcast that now anyway, even if you felt that way, you wouldn't want to shake something up, but just let

them go. I do think, assuming or if Bragg does in fact win the election in November then I would imagine and later that month there will be some conversations between Bragg and some senior I guess, for lack of a better term, political appointees, a vance personal appointees like Carry Dunne and like Mark Palmertz, who was also someone who comes from the world of big corporate law and who has you know, signed on temporary basis to be

a prosecutor in this case against the Trump organization. So that will be interesting to see, you know, at the end of the year whether or not you know, these two people who are important, you know, to the prosecution stay on. Having said that, in the case of Kerry Done, you've got a team of line prosecutors who have been working on this for a couple of years. You know, they didn't argue before the Supreme Court, but they're fully

immersed in the case. And when let's assume that Alan Alan Weisselberg, who has been charged, goes to trial, they're the ones who are going to be doing the prosecution, not Carried. Has there been any movement as far as we talked before about the Wisselberg indictment, has there been any movement or any move to indict anyone else, as

we expected. If there is, it's not visible. So I covered the UH investigation of Special Counsel Robert Mueller for a couple of years from seen and we talked about this a lot, and particularly early on, but this continued were accusations, mostly from Republicans, that you know, the Moller team was leaking, and of course they weren't. There were no leaks at all. From that, to the great frustration of me and everyone else who covered this, there was

nothing to get out of that black box. There have been similar accusations about the Manhattan District Attorney's office UM and to be fair there it's much more likely for local prosecutors, elected officials to leak than it is for federal prosecutors who are appointed and not you know, don't need to cry favor of the public, and you know, there's been accusations of that. At the same time, I

think there's been a heightened awareness. I think Vance's office knows that they have no margin for error, so they've been very careful about this. They do not want leaks to go out. They do not want to give like fuel to the fire. You know that the Trump organizations lawyers will will will exploit if it becomes clear that there are leaking stuff. So that's a long winded preamble to answer your question, which is that, UM, you know, I'm sure they're continuing to work on this, uh and

in several directions. One is that um Weislberg, and this has been the strategy. They would like to get him to think this through and decide that he'd rather help them and minimize his uh you know, potential time. The indictment against him and the Trump organization UM is well beyond just a you know, an accusation of some you know, uh, you know, poor decision in terms of taxes by Weislberg. It in some ways as a blueprint for like the prosecutors showing their hand like many people did this at

the Trump organization. This was standard practice. It wasn't as though Alan Wisenberg, the CFO, as alleged, is like a bad apple or a rogue or going off the reservation to feather his own nest. It's more a suggestion that this There are many executives at the Trump organization UM did this. So it's quite likely that you know, other senior executives not named Trump, but other senior executives are you know, who maybe got a car or a reduced rate apartment uh and did not include that as a

material benefit on their taxes. Um, you know, are concerned that they might get charged similarly. So I think it's fair to assume that, you know, the wheels were in motion if there are any other senior executives there now the senior executive everyone cares about the former president Donald J. Trump. That's you know again, it's you know, you read the indictment. You know, it's hard to believe that he probably didn't

you know, get some benefit like that himself. However, he was not the CFO, so it could be that you know, uh, these benefits were spread around and if Weislberg was the you know, the genius behind it, uh, and Trump can say like, hey, you know he he told me it was okay, that's say, you know, that's that's a defense. So that's why the pressure is being brought by the d a's office on Weiselberg is because you know, he's

the key guy. So you know, I think I think Donald Trump has or would have if if you know, things stand as they are now, some defense against the charge that he should have you know, maybe you could get him just payback the taxes that he owes, but he would be able to blame or at least say, you know, my CFO, you know who's the guy who's been doing this for decades that it was okay so or something like that. Yeah. And on a personal note, he's known for his workout regime and laying in a

rock band. He goes to the gym regularly. And this is another sort of informal legacy, you know, something that you learned from his mentor, Bob Fisk. Fisk, who's nine years old, way before was fashionable in the nineteen seventies and eighties, stayed in shape, He ran marathons, you know, he played tennis, uh and did all sorts of stuff. And I think it's uh and it used to be a hockey player. Um. And but sometimes bring his ice

skates and go play hockey, you know. So I think, um, that's one of the things Done realized is in order to be able to do everything the way Fisk could, you have to be in shape and you have to you know, take care of your body. So there's that. Um. So he goes to the gym and uh and works out pretty regularly. The band is funny. You can look it up online if you're interested in, you know, corporate

law rock. There are fundraising I didn't know this world existed, but there are fundraisers where you know, the New York City Bar Association for example. If somebody will bring together you know a bunch of rock bands consisting of not just the partners like Harry Dunne, but you know the guy from the accounting department or you know someone, and

all for good cause. But also all these people, even the ones without hair, could let their hair down, live out that dream that got sidetracked from when they went to law school. Thanks so much, Greg. That's Bloomberg Legal reporter Greg Farrell, and that's it for the edition of the Bloomberg Last Show. I'm June Grosso and you're listening to Bloomberg