It all began in 2012 when a Tiffany's customer wrote to Tiffany's to complain that the high-end retailer was selling its engagement rings at Costco. That was news to Tiffany's because the company was not aware of the sales and had not authorized them. An investigator went to the Huntington Beach Costco and saw the rings, complete with the Tiffany brand and referred to by the Costco sales personnel as "Tiffany rings." Interestingly, Costco did not offer the rings online, something that Tiffany alleged was done to avoid detection of the infringement.

Tiffany filed suit in \(2013 .{ }^{60}\) In 2014, the case survived a Costco motion for summary judgment. Costco had argued that "Tiffany" was a generic term used to describe a certain type of engagement ring setting, that is, a "Tiffany setting." The court held that there was a genuine issue of fact on the question of the generic meaning and/or infringement. \({ }^{61}\) In September 2015, a federal judge held that Costco did indeed infringe the Tiffany trademark. \({ }^{62}\) The court found that "Tiffany setting" was not a generic term. Tiffany had asked for \$2 million in damages, but a federal jury awarded Tiffany \(\$ 5.5\) million in compensatory damages and \(\$ 8.25\) million in punitive damages. \({ }^{63}\) The damage portion of the trial included evidence that Costco had sold 2,500 "Tiffany" rings, for a total of about \(\$ 10\) million. However, the sale of the Tiffany engagement ring is \(30 \%\) of Tiffany's total sales each year........

Discussion Questions
1. Explain whether there is a legal issue here.
2. Is "Tiffany ring setting" a generic term? Why is that issue important?