Tiffany and Company filed a lawsuit in New York on Thursday alleging that Costco is guilty of trademark infringement, counterfeiting, unfair competition, injury to business reputation, false advertising and deceptive business practice.
The high-end jeweler filed the suit after learning from a customer that the wholesaler was promoting a diamond engagement ring under the name "Tiffany."
The engagement ring in question was also advertised on in-store signs at a Costco store in Huntington Beach, Calif. with the name "Tiffany."
Tiffany began an investigation immediately after the customer's alert and learned that Costco has been selling rings under the name "Tiffany" for years without any knowledge of them doing so.
"We now know that there are at least hundreds if not thousands of Costco members who think they bought a Tiffany engagement ring at Costco, which they didn't," said Jeffrey Mitchell, Tiffany's legal counsel in the lawsuit.
"Costco knew what it was doing when it used the Tiffany trademark to sell rings that had nothing to do with Tiffany. This is not the kind of behavior people expect from a company like Costco, and this case will shed a much needed light on this outrageous behavior."
Costco Wholesale Corp., the largest wholesale club operator in the world with more than 600 sites worldwide, could not be reached for comment, according to the Associated Press.