Costco under Fire for use of Michael Kors Trademark in Advertisement

By Joseph Mandour on July 19, 2013

purse-1-150x150 Los Angeles – Designer fashion label Michael Kors LLC filed a lawsuit against Costco Wholesale Corp. for false advertising after the wholesaler included pictures of Michael Kors handbags in advertisements emailed to customers in April.

Costco is not an authorized Michael Kors retailer, and upon investigation, Michael Kors representatives could not find any of its bags for sale at the 19 retail locations it visited.

In its complaint, the fashion label alleges that the Costco deliberately misled customers by including prominently featured photos of Michael Kors handbags in an online advertisement, despite having no intention to sell the luxury designer bags.  Michael Kors brought its lawsuit against Washington-based Costco in U.S. District Court in the Southern District of New York on July 9.

The Costco ad suggested that Michael Kors bags were available for sale for prices starting at $99, when bags sold at authorized retailers cost at least double that price.  Michael Kors purses sell for $198 at the lowest on its online store and can cost upwards of $1,395.

While the ad did not explicitly state that the purses in the photos were Michael Kors designs, the photos did feature multiple Michael Kors designs that would clearly identify the bags as products of the luxury designer.

Michael Kors is seeking a court order barring any future marketing of Michael Kors products as well as payment of monetary damages.

This is not the first time that Costco has been accused of such “bait and switch” tactics.  In February, Tiffany & Co. filed a complaint against Costco for sale of “Tiffany” brand diamond engagement rings.

Tiffany & Co. has manufactured and sold high-end jewelry for 175 years and alleges it has maintained a reputation for quality products.  The rings sold at Costco were not affiliated with the company, and use of the “Tiffany” trademark was not authorized.

Tiffany claims that Costco’s use of the “Tiffany” brand has tarnished its image and done irreparable harm to the brand.  Costco defends that the use of “Tiffany” is the generic name for a ring setting popularized by the store, but Tiffany & Co. disagrees.

The lawsuit against Costco by Tiffany & Co. was also brought in U.S. District Court in New York’s Southern District.

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