Wednesday, July 17, 2013

Costco Getting Sued Again

The offending advertisement

The mega box store Costco is getting sued again, this time by Michael Kors. According to the Michael Kors people, Costco ran an advertisement depicting handbags, one of which had a Michael Kors trademark. Since Costco is not a licensed retailer of Michael Kors handbags, they got a little upset and are now threatening to sue for this violation.


Michael Kors uses a distinctive logo
If you remember, Tiffany & Company is also suing Costco for using “Tiffany” to describe the setting of their diamond rings. Tiffany & Company believes this is a misrepresentation of their product by a retailer. Costco has been putting on its signage a description of the ring as “Platinum Tiffany” while of course, it is not manufactured by Tiffany & Company. Costco is being accused of counterfeiting, copyright infringement and a host of other misdeeds.


Tiffany versus Costco
Costco is getting itself in a lot of trouble that it could probably have avoided all together. They are an extremely large retailer that purchases in quantity with a minimum markup. Costco’s first quarter earnings were up from $320 million last year to $416 this year so why they are stooping to false advertising and copyright infringement is beyond me. Many people shop at Costco because the price is right. I don't think their target market is super concerned with name brands, heck we all buy the Kirkland brand because it's usually good quality and a great price.


Costco sells some nice jewelry
People shop at Michael Kors and Tiffany & Company because the name brand is more important than the price. Yes everyone wants a good deal but those who want a good deal shop for quality as well as price; the name on the product is usually beside the point. Costco needs to get back to its fundamentals, good products at reasonable pricing. You can really damage your reputation if these companies can get these claims to stick, not good for Costco’s bottom line.
Why damage your reputation with potential copyright infringement?

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