Selling 'Tiffany' rings could cost Costco dearly

US wholesaler Costco is facing a $19.4m bill for damages after jewellery brand Tiffany won a ruling in a trademark infringement suit.

The latest round in the long-running dispute - which dates back to 2013 - has gone to the jewellery company and updates a ruling in October 2016 that awarded Tiffany $5.5m in compensatory damages and $8.25m in punitive damages. The updated decision by Judge Laura Taylor Swain in the US District Court for the Southern District of New York has now increased the compensatory portion of the award to $11.1m.

The case centred on the term 'Tiffany', and whether it should be considered a generic description for a type of diamond setting commonly used for engagement rings and popularised by the jewelry company, or an enforceable trademark.

Costco - which says it will appeal the latest decision - has claimed it had made only around $781,000 in profit from the sale of around 2,500 rings, and had offered to pay that amount in reparation after being found guilty of wilfully infringing Tiffany's trademarks in 2015.

In addition to the higher damages, the latest verdict also permanently bars Costco from selling anything that Tiffany did not make as 'Tiffany' products, unless it uses modifiers such as 'Tiffany setting' or Tiffany style'.

"We brought this case because we felt a responsibility to protect the value of our customers' purchases and to ensure that Costco's customers were not misled," said Tiffany in a statement.