"Me Too" Evidence Can Establish Discrimination Claim

• Pages: 20-21
• Date: 01 October 2022
• Author: Kelso L. Anderson
• Subject Matter: Derecho Civil

Trademark Award

Vacated over

Questions of

Consumer Confusion

By Stephen Car r, Litigation News

Associa te Editor

A federal court of appeals threw out a

$21 million judgment and remanded the

case to determine whether a retailer

infringed a trademark by marketing

generic diamond rings with the term

“Tiany.” The appellate court held that

the district court erred by failing to

consider the retailer’s evidence, which

raised a triable issue as to whether

consumers would be confused about

the distinction between rings made

by high-end jeweler Tiany & Co. and

generic Tiany-style ring settings. ABA

Litigation Section leaders note that the

decision underscores the highly fact-

specif‌ic nature of trademark litigation.

In Tiany and Co. v. Costco

Wholesale Corp., the jeweler Tiany

accused big-box chain Costco of violat-

ing the Lanham Act and New York law

by using “Tiany” to describe its rings.

Costco maintained that it was entitled

to use “Tiany” because the term was

not just a brand-name mark but also

used widely in the jewelry industry to

refer to a style of diamond setting made

famous by Charles Tiany in the 1800s.

Costco sells a variety of diamond

engagement rings specif‌ically produced

for it by the jeweler R.B. Diamond, Inc.,

which it refers to as “unbranded.” The

rings are available in a variety of set-

tings, such as bezel, cathedral, and the

Tiany setting. The retailer displays the

rings in prominent cases near the front

of its stores with sale signs indicating

the setting and, in more noticeable font,

the price. Costco admitted that it some-

times used “Tiany settings” in its mar-

keting and sometimes merely “Tiany.”

The jeweler further pointed out that

Costco’s additional eorts to promote

Tiany-style diamonds to more upscale

customers mimicked some of Tiany’s

marketing and displayed Tiany’s web-

site near the rings. It also cited emails

from Costco customers who were con-

cerned about the source of the rings

and the failure to clarify the confusion.

Tiany moved for sum mary judg-

ment based in pa rt on its internet

customer sur vey of Costco custome rs

who said that they woul d “consider

buying a diamon d engagement ring at

Costco that cost at lea st $2,500.” The

customers were sh own pictures of the

rings alongsi de the signs Costco used

to market them. Th e survey’s author

concluded tha t “more than two out of

f‌ive were likely confuse d into believing

that Tiany & Co. was th e source of

the rings .”

The U.S. D istrict Court for the

Southern Dis trict of New York granted

the jeweler summ ary judgment on

liability and h eld a trial to determine

if Tiany was entitle d to lost prof‌its

statutory damages under the Lanham

Act. The cour t ultimately made its

own determination o n damages and

awarded Tiany “ trebled prof‌its in the

amount of $11 .1 million (based on the

advisory jur y’s award of $3.7 million),

along with the add itional $8.25 millio n

in punitive damag es awarded by the

jury.” On appeal , Costco argued that

the court erre d by not crediting its evi-

dence that contra dicted Tiany’s cus-

tomer survey and sh owed that it acted

in good faith.

The U.S. C ourt of Appeals for the

Second Circuit agreed that there was

a triable issue of f act as to whether

consumers of di amond rings would

have been misled by Co stco’s market-

ing. To prove a violation of the trad e-

mark laws, a plain ti must establish

that a defendant ’s actions are likely

to cause confusi on with a valid mark.

Specif‌ical ly, there must be “a pro b-

ability of confu sion... aecting num er-

ous ordinar y prudent purchasers.” Th e

appellate cour t concluded that Costco

had establis hed a fact issue by provid-

ing evidence that “ Tiany” is a generic

descriptor, that Costco did n ot brand

its rings with the Ti any mark, and that

buyers received Costco-branded sales

documents . The court also reasoned

that because e ngagement rings are

such an impor tant purchase, custom-

ers would researc h the dierent ring

options and lea rn about the dierence

between the mar k and the setting and

recognize that a Tia ny-style setting

was not a Tiany ring .

Litigation Section leaders believe

that interpretation of the survey data

was a key issue. “The appellate court

here took the district court to task for

taking Tiany’s customer survey evi-

dence at face value,” observes Michael

D. Steger, New York, NY, cochair of the

Litigation Section’s Intellectual Property

Committee. “The court’s opinion makes

clear that there was at least a triable

issue of fact as to whether sophisticated

customers in the market for diamond

engagement rings would be misled by

Costco’s marketing,” he adds.

The Second Circuit’s decision

stressed the importance of provid-

ing accurate consumer information

in competitive markets. “In the trade-

mark space, the law is very concerned

with consumer confusion, which is just

a dierent take on protecting con-

sumer welfare. If consumers are con-

fused about the source of a product,

they are not making an informed pur-

chasing choice,” explains Lauren M.

Weinstein, Washington, DC, cochair

of the Section’s Antitrust Litigation

Committee.

“A trademark is essentially a law-

ful monopoly. Antitrust law does not

forbid monopolies, only the abuse of

monopoly power,” notes Weinstein.

“Similarly, trademark law does not

penalize all uses of other’s trademarks,

only improper uses of protected marks.

This case shows that when a plainti

can demonstrate that a mark is being

used as a descriptor that consumers

would understand as such, the trade-

mark holder’s monopoly does not pro-

hibit that use,” she concludes.

“Me Too” Evidence

Can Establish

Discrimination Claim

By Kelso L. Ande rson, Litigation News

Associa te Editor

A federal appe llate court has ruled

that conf‌lictin g “me too” evidence—

other instanc es of discrimination or

harassment against other employees

by the alleged har asser or the same

employer—may be sucient to with-

stand a defendant’s dispositive motion

by aiding a plainti in establishing a

prima facie showing of discrimination.

While ABA Litigation Secti on leaders

agree that “me too” evi dence is rel-

evant in discrimin ation cases generally,

FALL 2022 • VOL. 4 8 NO. 1

20 | ABA LITIGATION SECTIO N

Published in Litigation News Volume 48, Number 1, Fall 2022 . © 2022 by the American B ar Association. Repr oduced with permis sion. All rights rese rved. This informa tion or any portion th ereof may not be cop ied or disseminated in any for m

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