Costco

REUTERS/John Gress JG/GN

  • Costco was just ordered to pay Tiffany & Co. $19.4 million after selling rings under the “Tiffany” name.
  • This isn’t the first time the retailer’s approach to designer brands has raised questions, as seen by a 2013 Michael Kors lawsuit.
  • Customers are losing interest in designer brands like Kors and Ralph Lauren.

Costco’s ability to sell designer brands like Ralph Lauren and Calvin Klein is a huge draw for many budget shoppers.

However, the legality of parts of the retailer’s strategy is being called into question.

On Monday, a federal judge ruled that Costco owed the jewelry company Tiffany & Co. $19.4 million after the budget retailer sold diamond engagement rings using the Tiffany name.

While Costco had argued that the word was understood as a generic reference to a ring’s setting, not the brand itself, a court determined in 2015 that selling items described simply as “Tiffany” infringed on Tiffany’s trademark.

This isn’t the first time Costco has been accused of falsely marketing designer products.

In 2013, Michael Kors sued Costco for allegedly advertising the designer’s handbags without being authorized to sell them….