Tiffany and Company v. Costco Wholesale Corporation

Filing 438

MEMORANDUM OPINION AND ORDER: Treating the jury's verdict as advisory only as to the recovery of profits, the Court finds that Plaintiffs are entitled to recover trebled profits of $11.1 million, and judgment will be entered in their favor in that amount, plus prejudgment interest at the annual rate set under 26 U.S.C. § 6621(a)(2) for the period from February 15, 2013, through the date of judgment and punitive damages of $8.25 million, unless Plaintiffs file within seven (7) days from the date hereof a written election to instead recover the $2 million in statutory and $8.25 million in punitive damages awarded by the jury. Costco is permanently enjoined from using the mark TIFFANY as a standalone term, not com bined with any immediately following modifiers such as "setting," "set" or "style," in connection with its advisement and/or sale of any products that were not manufactured by Plaintiffs or their affiliates. Any applications for attorneys' fees and costs must be supported by evidence and submitted within the time frame set by Federal Rule of Civil Procedure 54(d). SO ORDERED. (Signed by Judge Laura Taylor Swain on 8/14/2017) (ama)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------------------------x
TIFFANY AND COMPANY and
TIFFANY (NJ) LLC,
Plaintiffs,
-v-

No. 13CV1041-LTS-DCF

COSTCO WHOLESALE CORP.,
Defendant.
-------------------------------------------------------x

MEMORANDUM OPINION AND ORDER
By Opinion and Order dated September 8, 2015 (“Summary Judgment Opinion,”
docket entry no. 175), the Court granted summary judgment in favor of Plaintiffs (collectively,
“Tiffany”), holding Costco liable for trademark infringement and trademark counterfeiting under
the Lanham Act with respect to engagement rings sold under certain signage that referenced the
mark “Tiffany” as a standalone term. The recitation of undisputed facts and the conclusions of
law set forth in the Summary Judgment Opinion are incorporated herein by reference. A jury
trial on Tiffany’s claims for monetary recovery in the form of profits and statutory damages
pursuant to 15 U.S.C. Section 11171, and punitive damages pursuant to New York state law, was
held from September 19, 2016, to October 5, 2016. The jury rendered unanimous verdicts that
Costco’s relevant profits – those derived from sales of rings “using display case signage that
included the ‘Tiffany’ mark as a standalone term, not combined with any immediately following

1

15 U.S.C. § 1117(c) permits the plaintiff in a case involving the use of a counterfeit
mark to elect, at any time before final judgment is rendered, to recover an award of statutory
damages instead of profits.
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modifier such as ‘setting,’ ‘set’ or ‘style’” – totaled $3,700,000, that such profits are inadequate
to compensate Tiffany, that $5,500,000 would be a just award of profits, and that Tiffany is
entitled to an award of statutory damages for the same conduct in the amount of $2,000,000 and
punitive damages for such conduct in the amount of $8,250,000.
On October 20, 2016, the Court issued an order directing the parties to address
whether and to what extent the jury’s verdict should be treated as advisory with respect to: (a)
the determination of Costco’s relevant profits; (b) whether that profit determination was
inadequate or excessive as an amount to be recovered by Tiffany in light of the nature of
Costco’s wrongful conduct; and, if so, (c) what amount would be just as an award of profits. The
parties were also directed to address: whether there are any “extenuating circumstances” within
the meaning of 15 U.S.C. § 1117(b) that preclude the trebling of the profits award; whether and
to what extent equitable and injunctive relief ought to be granted; and whether the jury’s verdict
is supported by the weight of the evidence and otherwise authorized under the law. (See docket
entry no. 387.) The parties’ familiarity with the underlying background of the case and the trial
evidence is assumed.
This Memorandum Opinion and Order includes the Court’s findings of fact and
conclusions of law with respect to the issues of Costco’s profits and the appropriate recovery
thereof and Tiffany’s entitlement to equitable relief, and addresses the parties’ additional
arguments. The Court has considered thoroughly the trial record and all of the parties’
submissions. As explained below, Tiffany is entitled to recover $3.7 million as profits for
trademark infringement, trebled, if it does not instead elect to recover statutory damages.
Tiffany is also entitled to recover the jury’s punitive damages award of $8.25 million.

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I.

Whether the Jury Verdict as to Profits is Advisory
In the Summary Judgment Opinion, the Court stated that “[i]t was still an open

question in the Second Circuit as to whether the accounting of profits in a trademark
infringement action is an equitable or legal remedy.” (S.J. Op. at 36.) In the parties’ post-trial
briefing, Costco contends that the jury verdict on the “Accounting of Profits Issues” was
rendered on an equitable remedy for which there is no federal right to a jury trial, and that the
Court is obligated to make an independent determination as to the accounting of profits. Tiffany,
likewise, urges that “regardless of where the Court comes out on the state of the law, Tiffany
believes the Court should set out findings of fact that would support the jury’s determinations,
whether or not it was advisory on actual profits.” (Tiffany Br. at 3.) Although the Second
Circuit has not explicitly ruled on the issue, in Gucci America, Inc. v. Weixing Li, a trademark
infringement action under 15 U.S.C. Section 1117(a), the court characterized the accounting of
profits sought by the plaintiff as an “equitable remedy.” 768 F.3d 122, 130 (2d Cir. 2014). The
Court will treat the jury verdict as to accounting of profits as advisory and make its own
findings.
Even when accepting the aid of an advisory jury, the Court must make its own
independent findings of fact and conclusions of law as required by Federal Rule of Civil
Procedure 52(a). See, e.g., DeFelice v. American Int’l Life Assur., 112 F. 3d 61, 65 (2d Cir.
1997) (noting that a trial court using an advisory jury must both make ‘its own factual findings
and conclusions, in reliance upon the advisory jury’s verdict if the court so chooses, and . . .
explain how it arrived at those findings and conclusions.”) The views of an advisory jury may
be “an important part of the data taken into consideration in arriving at the court’s independent
conclusion.” Birnbaum v. United States, 436 F. Supp. 967, 988 (E.D.N.Y. 1977).

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By way of brief background, in its Summary Judgment Opinion, the Court found
that Tiffany had proven its federal and state law claims that, by displaying solitaire diamond
rings in Costco stores next to signage that included the word “Tiffany” as a standalone term not
combined with an immediately following modifying word such as “setting,” “set,” or “style”
(“Standalone Signage”), Costco infringed Tiffany’s trademark and engaged in unfair competition
under state and federal law and that Costco counterfeited the Tiffany trademark under federal
law. At trial, the jury was instructed to determine what monetary relief, if any, Tiffany was
entitled to recover as a result of Costco’s trademark infringement, unfair competition, and
counterfeiting. Among the monetary relief categories was an accounting for profits, as to which
the jury was instructed that “Tiffany is entitled to an award of all profits earned by Costco that
are attributable to Costco’s misuse of Tiffany’s trademark through infringement and/or
counterfeiting from February 14, 2007, to the present time.” (Court Ex. 2 at 15.) The jury was
also instructed that it was to determine whether “one sign, which used the word ‘Tiffany’ on one
line and the word ‘set’ at the beginning of the following line[,] was a use of ‘Tiffany’ as a
standalone term or a use of ‘Tiffany set’ as a combined term in describing the merchandise.”
(Id. at 16.)
The Court makes the following additional findings of fact on the basis of its
consideration of the entire trial record, including documentary and physical evidence, the
testimony, and the demeanor and credibility of the witnesses. Costco has sold rings under
signage using “Tiffany” without a following modifier since before 2007. There was no evidence
as to when precisely this usage began, nor any credible evidence as to Costco’s reason for using
“Tiffany” without a following modifier.
Costco presented credible evidence, and the Court finds that, “Tiffany” is used

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within the jewelry industry in the context of the combined term “Tiffany setting” to denote a
certain type of multipronged solitaire ring setting. Costco used the terms “Tiffany style” and
“Tiffany setting,” as to which Tiffany did not assert trademark infringement or counterfeiting
claims in this case, in a large proportion of its diamond ring signage. Costco also used the
infringing Standalone signage to a significant degree.
Costco’s proffered explanations for the Standalone usage – that clerical workers
merely copied language from jewelry suppliers’ invoices as shorthand for Tiffany settings and
that Costco therefore was not engaging in intentional infringement or counterfeiting – were not
credible in light of trial evidence that showed that displays of fine jewelry are an integral part of
Costco’s marketing strategy, Costco made frequent internal and external references to Tiffany as
a quality and style benchmark, and Costco displayed of rings with “Tiffany” Standalone Signage
in proximity to displays of name-brand luxury watches. Costco’s salespeople described such
rings as “Tiffany” rings in response to customer inquiries, and were not perturbed when
customers who then realized that the rings were not actually manufactured by Tiffany expressed
anger or upset. Costco’s upper management, in their testimony at trial and in their actions in the
years prior to the trial, displayed at best a cavalier attitude toward Costco’s use of the Tiffany
name in conjunction with ring sales and marketing. Additional evidence supporting the
conclusion that Costco engaged in culpable standalone use of the mark “Tiffany” included
Costco’s use of purported valuations identical to prices that Tiffany had actually charged for
similar rings, in certificates that Costco provided to buyers of rings sold under the infringing
signage.
In light of this evidence, the Court finds that Tiffany is entitled to recover
Costco’s profits derived not only from sales of rings under signage in which “set,” “setting” or

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“style” did not follow “Tiffany” on the same line of a given sign, but also those in which “set”
was the first word of the line below one ending with the word “Tiffany.” The Court finds that
Costco used Tiffany’s trademark to attract customer attention to the fine jewelry items by
indicating that the items accompanied by such signage were Plaintiffs’ products although they
were in actuality generic items. The fact that some sort of marking other than Tiffany’s actual
marking appeared inside of the generic rings is insufficient to indicate that Costco’s use of the
Tiffany mark was not an intentionally deceptive marketing ploy, as the inside markings were not
visible by customers looking into the case displays and both Costco’s signage and Costco’s
salespeople referred to the rings as “Tiffany.” The advisory jury verdict as to profits, which
appears to have taken into account all sales associated with signage that used the “Tiffany”
without a following modifier on a single line, is consistent with these findings.
It is not possible to determine from Costco’s records precisely which form of
signage was used with each ring sale. The evidence presented at trial consisted principally of
Costco’s records of item serial numbers and inventory units for the period within the statute of
limitations, sales and returns of items with such serial numbers within that period, records of the
signage information associated with the items during that time period, and cash register sales
information from that period showing the item numbers and sales prices of rings purchased.
Because the data did not reflect how long any given item had been on display in a store as of the
time of purchase, the signage data that Costco utilized to purportedly match to sales at particular
points in time was not definitive.
The data as to numbers of units and signage iterations produced by Costco in the
course of the litigation varied somewhat from time to time. Costco also proffered vendor
invoices purportedly associated with the relevant periods. Some, but not all, of the signage

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correlated to descriptions used on the invoices. The trial evidence also included a list of ring
sales from February 14, 2007, to August 13, 2013, showing a total of 4,053 units sold under
signage that included the word “Tiffany” for a total dollar amount of $17.1 million (Tr. 629,
738), and testimony of Costco’s Chief Merchandising Officer, Douglas Schutt, in which he
estimated that Costco had sent approximately 11,000 letters to persons who had purchased rings
during the period where the signage “had ‘Tiffany’ anywhere in the description of that particular
diamond ring.” (Id. 484, 487). Schutt did not, however, testify to independent knowledge of the
figure. (Id. at 487.)
At trial, Costco presented exhibit DTX 806, which purported to show “Gross
Sales and Net Sales of Subject Rings” from February 14, 2007, through December 16, 2012, and
which was color-coded and included columns showing “gross sales,” “net sales,” and “profits”
associated with different item numbered rings associated with various iterations of signage.
Items color-coded red in that chart were characterized as associated with signage reading
“PLATINUM TIFFANY VS2.1 SET or PLATINUM TIFFANY VS2, 1 without SET”; the item
color-coded yellow was characterized as associated with signage reading “SOLITAIRE
TIFFANY” on the second line; and items color-coded dark green were characterized as
associated with signage reading either “TIFFANY SET or TIFFANY SETTING,” and those
color-coded light green as associated with signage reading “TIFFANY on Line 1 and SET on
Line 2 with nothing in between.” (DTX 806.) Gross and net sales/units figures for rings from
the relevant time period were also presented, with item number and signage record information,
in DTX 139. The Court finds, based on the credible information included in trial record as a
whole, that Tiffany carried its burden of proving that sales, net of returns, of approximately $7.2
million were derived by Costco during the relevant period from Standalone Signage, including

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such signage in which the second line of the sign began with the word “set.” (DTX 139, DTX
806.)
Once the plaintiff seeking to recover an infringer’s profits under 15 U.S.C.
section 1117(a) has proven the defendant’s sales, the defendant has the burden of proving “all
elements of cost or deduction claimed” for purposes of determining the profits associated with
the sales. 15 U.S.C.S. § 1117(a) (LexisNexis 2006). At trial, Costco proffered vendor invoices
associated with ring sales, but principally relied in presenting its evidence of profits on a
percentage figure calculated by its expert witness, Brad Cornell, who testified that he
“interpreted Costco’s margin to be the price the warehouse charges the customer minus the total
cost that they paid to acquire the inventory and [Cornell explained that he had] calculated that as
a percentage for every single order that Costco had . . . I just took the average across all their
purchases and it was 10.31.” (Tr. at 1125-26.) Costco’s Chief Merchandising Officer
acknowledged, however, that “run of the mill” jewelry stores charge an estimated markup of 50100% on their merchandise. (Tr. 443.) Tiffany’s expert witness, Brad Kaczmarek, used a
multiplier of 13% in computing Costco’s profits, based on a deposition testimony by Costco’s
CEO that Costco generally uses a 13% margin for jewelry sales. (Tr. 274).
Tiffany also presented credible evidence that Costco’s profits are not limited to
the margin between product costs and sales, but also include very substantial sums derived from
warehouse membership fees. Douglas Schutt, Costco’s Chief Merchandising Officer,
acknowledged that Costco’s “business model of charging the membership fee . . . is one of the
things that enables [Costco] to charge less of a markup on the individual products [Costco]
sell[s].” (Tr. 444.) Costco uses a “treasure hunt” marketing concept - creating “buzz” among
members by offering “brand name merchandise at exceptional values” to drive frequent member

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visits and renewals. (Id. 461-63.) Kaczmarek, Tiffany’s expert, testified credibly that even the
13% markup figure that he had used in his analysis is very low, and that Costco is “able to
survive with that low markup because they charge membership fees annually. So they make
most of their money on the membership fees and so that’s how they can actually make such
small profits on the items. That’s what attracts customers to want to go to Costco.” (Tr. 281.)
The Lanham Act provides that “[i]n assessing profits the plaintiff shall be
required to prove defendant’s sales only; defendant must prove all elements of cost or deduction
claimed.” 15 U.S.C.S. § 1117(a) (LexisNexis 2006); see also GTFM, Inc. v. Solid Clothing,
Inc., 215 F. Supp. 2d 273, 304 (S.D.N.Y. 2002) (“This sequence of proof . . . places the burden
of proving costs on the party with the superior access to such information, namely the infringing
defendant.” (quoting Am. Honda Motor Co., Inc. v. Two Wheel Corp., 918 F.2d 1060, 1063 (2d
Cir. 1990)). “[A] plaintiff is not entitled to profits demonstrably not attributable to the unlawful
use of his mark, but . . . the burden of proving any deduction for sales not based on the infringing
mark falls upon the infringer.” Int’l Star Class Yacht Racing Ass’n v. Tommy Hilfiger U.S.A.,
146 F.3d 66, 72 (quoting Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316 U.S.
203, 206 (1942)) (internal quotation marks and citations omitted). Furthermore, where, as here,
the Court has determined that the infringer acted willfully,2 the Court must analyze the claimed
cost set-offs “with particular rigor,” requiring the court to “give extra scrutiny to the categories
of overhead expenses claimed by the infringer to insure that each category is directly and validly
connected to the sale and production of the infringing product.” Audemars Piguet Holding S.A.
v. Swiss Watch Int’l., Inc., 42 F. Supp. 3d 540, 544 (S.D.N.Y. 2014) (internal quotation marks
and citations omitted). In addition, 15 U.S.C. Section 1117(a) provides, “[i]f the court shall find

2

See Summary Judgment Opinion at 33.

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the amount of recovery based on profits is either inadequate or excessive the court may in its
discretion enter judgment for such sum as the court shall find to be just, according to the
circumstances of the case.”
The Court finds that Costco has failed to prove that its profits on sales of rings
under Standalone Signage were limited to the 10.31% margin computed by Costco’s damages
expert. That margin is artificially small, and was made possible chiefly by the subsidizing
impact of membership fees, which are themselves enhanced by the pull of the “treasure hunt”
tactic in which Costco uses extraordinary bargains on brand-name merchandise to pull customers
into its stores. Fine jewelry is the first display case customers encounter in Costco’s standard
store layout, along with name-branded luxury watches. (Tr. 451-452, 466-467, 470.) In light of
the role of the membership fees in Costco’s business model and of its use of Tiffany’s mark in
selling fine jewelry, which is prominently displayed at the entrance of the stores to catch the eye
of the customer, the Court finds it necessary and appropriate as an equitable matter to impute a
sufficient portion of the membership revenue to the sale of these rings to bring the recoverable
profit margin on the rings into the profit margin range of a typical run-of-the-mill jewelry store,
which is approximately 50-100%. The Court further finds that the advisory jury’s award of $3.7
million in profits on the Standalone Signage sales, a figure that is slightly more than 50% of the
sales revenue proven in connection with those sales, constitutes a just and appropriate award of
Costco’s profits attributable to the infringing sales.
The Court does not, however, concur in the jury’s further finding that the $3.7
million figure is inadequate, such that an additional award of $1.8 million, raising the profit
recovery figure to $5.5 million, is necessary. Tiffany is therefore entitled to $3.7 million as its
award of Costco’s profits from infringing sales of the diamond rings under Standalone Signage.

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II.

Trebling of the Profits Award
Pursuant to 15 U.S.C. Section 1117(b) (LexisNexis 2006), “the court shall, unless

the court finds extenuating circumstances, enter judgment for three times such profits or
damages [calculated under 1117(a)], whichever is greater, together with a reasonable attorney’s
fee . . . .” Id.; see also Fendi S.A.S. Di. Paola Fendi E Sorelle v. Cosmetic World, Ltd., 642 F.
Supp. 1143, 1147 (S.D.N.Y. 1986). Costco, essentially reiterating its rejected trial and summary
judgment arguments that its standalone use of “Tiffany” was a shorthand reference to alleged
jewelry industry “generic” usage of “Tiffany” as the name for a style of ring setting, argues that
extenuating circumstances render inappropriate trebling of the profits award as damages for its
counterfeiting of Tiffany’s mark. Extenuating circumstances will be present only in “a rare
case,” such as in the case of “an unsophisticated individual, operating on a small scale, for whom
the imposition of treble damages would mean that he or she would be unable to support his or
her family.” Koon Chun Hing Kee Soy & Sauce Factory, Ltd v. Star Mark Mgmt., Inc., 628 F.
Supp. 2d 312, 325 (E.D.N.Y. 2009) (internal quotation marks and citations omitted).
Costco has not established that any “extenuating circumstances” warrant denial of
a treble award. Costco is a large corporation with billions of dollars in annual sales and profits.
(See PTX 17A.0025, 28, 46, 47 (Costco has annual sales of over $113 billion, and made $2.4
billion in profits in 2014)). Its arguments draw on good faith and genericism positions that were
clearly rejected by the jury, which found Costco liable for substantial punitive damages, and are
also rejected by this Court based on its own evaluation of the evidence. Accordingly, the Court
finds that there are no “extenuating circumstances” warranting the denial of treble damages and
that Tiffany is entitled to recover awarded $11.1 million, or three times the amount of Costco’s

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profits of $3.7 million, under 15 U.S.C. Section 1117. For the same reasons, the Court further
finds that Tiffany is entitled to recover its reasonable attorney’s fees. See 15 U.S.C. § 1117(b).

III.

Punitive Damages Award
The jury found that Tiffany was entitled to punitive damages, and awarded

Tiffany punitive damages in the amount of $8.25 million. Costco contends that the punitive
damages are not authorized under New York law in the absence of a valid claim for
compensatory damages, and that the amount awarded is contrary to the weight of the evidence
and excessive.
Under New York law, “[a] demand or request for punitive damages is parasitic
and possesses no viability absent its attachment to a substantive cause of action.” Rocanova v.
Equitable Life Assurance Society of United States, 83 N.Y.2d 603, 616 (N.Y. 1994). The cases
cited by Costco stand for the uncontroversial proposition that there can be no “stand-alone”
punitive damages claim if there is no longer a compensatory cause of action remaining. It goes
without saying that there were substantive causes of action to which the punitive damages
request attached in this case.
Costco also argues that, because Tiffany only sought an accounting of profits and
not “actual damages,” it is precluded from seeking punitive damages. Although some courts in
the Second Circuit have drawn a distinction between actual damages and profits for the purposes
of the Lanham Act, others have characterized both as “actual damages” available under the
Lanham Act. See, e.g., Malletier v. Artex Creative Int’l Corp., 687 F. Supp. 2d 347, 356
(S.D.N.Y. 2010). Furthermore, the Lanham Act itself contemplates the possibility of an award
of statutory damages (sought here), which permits consideration of both punitive and

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compensatory factors, without the need to establish profits or actual damages in the recognition
that such measures of monetary relief may be difficult to prove in these cases. See All-StarMarketing Grp., LLC v. Media Brands Co., Ltd., 775 F. Supp. 2d 613, 621-22 (S.D.N.Y. 2011).
The provision for statutory damages in the Lanham Act thus explicitly provides a mechanism to
compensate plaintiffs even in the absence of proof of actual damages or profits. Malletier v.
Carducci Leather Fashions, Inc., 648 F. Supp. 2d 501, 504 (S.D.N.Y. 2009) (“where . . . a
defendant is shown to have acted willfully, a statutory award should incorporate not only a
compensatory, but also a punitive component . . .”); Polo Ralph Lauren, L.P. v. 3M Trading Co.,
Inc., No. 97 CV 4824, 1999 WL 33740332 (S.D.N.Y. Apr. 19, 1999), at *5 (“Jud[ing] by [the
Copyright Act’s] standards, an award of statutory damages is designed to serve both
compensatory and punitive purposes.”) Accordingly, the Court finds that punitive damages are
not preluded in this case by Tiffany’s pursuit of an accounting of profits and statutory damages
rather than “actual damages.”
The issues of whether punitive damages were warranted and, if so, of how much
punitive damages to award were within the province of the jury, and the jury’s decision cannot
be set aside unless “there exists such a complete absence of evidence supporting the verdict that
the jury’s findings could only have been the result of sheer surmise and conjecture, or the
evidence in favor of the movant is so overwhelming that reasonable and fair minded persons
could not arrive at a verdict against it.” Providencia V. ex rel. K.V. v. Schultze, No. 02 CV
9516, 2009 WL 890057, at *1 (S.D.N.Y. Apr. 2, 2009) (quoting Brady v. Wal-Mart Stores, Inc.,
531 F. 3d 127, 133 (2d Cir. 2008) (internal quotation marks omitted)). As the Court stated in its
Summary Judgment Opinion, “Tiffany . . . proffered [in connection with that motion practice]
evidence upon which the finder of fact could conclude that Costco’s behavior satisfied the

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‘gross, wanton or willful’ standard” required for awarding punitive damages.” (Docket entry no.
175 at 34.) Even more evidence of conduct supporting punitive damages was adduced at trial,
including evidence of the conduct and attitude of Costco’s senior executives towards use of the
“Tiffany” mark and the lawsuit, customer confusion, and marketing strategies designed to
invoke an association with Tiffany. Given that there plainly was enough evidence to support the
jury’s award of punitive damages, the jury’s finding that punitive damages were warranted will
not be disturbed.
Finally, Costco contends that the punitive damages award of $8.25 million is
excessive under New York law and as a matter of due process. The Court notes that at the outset
that Costco is a company with billions of dollars in annual revenue. In making its excessiveness
argument, Costco presumes that the other elements of the verdict were invalid—namely, that
there was an absence of actual damages and that the maximum permissible profits award was
$381,718 (i.e., 10.31 percent of $3.7 million). Using the $3.7 million profits figure set here by
the Court (or even the $2 million statutory damages award figure) as the benchmark, however,
the punitive damages award of $8.25 million is comfortably within the four-to-one benchmark
referenced by the Supreme Court in State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408,
425 (2003). Indeed, in one of the cases cited by Costco, the court awarded punitive damages that
were close to six times the compensatory damages award. See Getty Petroleum Corp. v. Island
Transp. Corp., 862 F.2d 10, 12-14 (2d Cir. 1988). Accordingly, the Jury’s punitive damages
award of $8.25 million is neither unconstitutional nor otherwise excessive.

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IV.

Injunctive Relief
Costco does not object to the imposition of a permanent injunction, arguing only

that further relief in the nature of damages is unnecessary to punish or deter the company from
further violations of Tiffany’s rights. The Court finds that imposition of a permanent injunction
is warranted, and that such relief necessary to deter Costco from pursuing further illegitimate
efforts to trade on the fame of Tiffany’s mark and the reputation of Tiffany’s goods. The Court
finds that Tiffany has demonstrated that (1) it is likely to suffer irreparable harm to its name and
good will in the absence of a permanent injunction; (2) that Tiffany has no adequate remedy at
law; (3) that the balance of hardships weighs in Tiffany’s favor and (4) that the public interest
would not be disserved by the issuance of a permanent injunction. See eBay, Inc. v. MercExch.
L.L.C., 547 U.S. 388, 391 (2005).

It is hereby ordered that Costco is permanently enjoined from using the mark
TIFFANY as a standalone term, not combined with any immediately following modifiers such as
“setting,” “set” or “style,” in connection with its advisement and/or sale of any products not
manufactured by Plaintiffs or their affiliates.

V.

Consistency of the Verdicts with the Law and the Evidence
Although Costco has not made explicit motions under Rule 50(b) and 59, it has

made a number of arguments that implicate the weight and propriety of the evidence. Costco’s
legal challenges to the verdicts have been rejected in the foregoing portions of this Memorandum
Opinion. Costco’s arguments with respect to the evidentiary bases of the jury’s implicit
conclusions concerning the extent and reprehensibility of Costco’s wrongful conduct are

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similarly meritless. Costco made its arguments concerning the admissibility of evidence and its
weight in the course of the trial. Costco has demonstrated no proper basis in its submissions for
finding that any of the Court’s evidentiary rulings were improper, and the Court finds that the
verdicts reached by the jury as to basic profits, statutory damages and punitive damages were
well supported by the evidence.

CONCLUSION
Treating the jury’s verdict as advisory only as to the recovery of profits, the Court
finds that Plaintiffs are entitled to recover trebled profits of $11.1 million, and judgment will be
entered in their favor in that amount, plus prejudgment interest at the annual rate set under 26
U.S.C. § 6621(a)(2) for the period from February 15, 2013, through the date of judgment and
punitive damages of $8.25 million, unless Plaintiffs file within seven (7) days from the date
hereof a written election to instead recover the $2 million in statutory and $8.25 million in
punitive damages awarded by the jury.
Costco is permanently enjoined from using the mark TIFFANY as a standalone
term, not combined with any immediately following modifiers such as “setting,” “set” or “style,”
in connection with its advisement and/or sale of any products that were not manufactured by
Plaintiffs or their affiliates.

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Any applications for attorneys’ fees and costs must be supported by evidence and
submitted within the time frame set by Federal Rule of Civil Procedure 54(d).

SO ORDERED.

Dated: New York, New York
August 14, 2017
/s/ Laura Taylor Swain
LAURA TAYLOR SWAIN
United States District Judge

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