On last Friday in a Manhattan federal court, Michael Kors Holdings Ltd., the company behind the popular luxury goods of American fashion designer Michael Kors, sued Costco Wholesale Corp. for recent false advertising of Michael Kors handbags. One example cited in the filed complaint was an email Costco sent out in April advertising handbags “starting at $99.99”. The ad implied some of the handbags included Michael Kors bags, showing the products with the brand’s trademarks visible on the handbags in the ad. The luxury company called it a “bait-and-switch” scheme in the federal lawsuit, and asserted that Costco is not an authorized retailer of Michael Kors handbags.
Michael Kors is reportedly seeking a court order to prevent further advertising of its items by Costco. Additionally, profits and punitive damages as a result of the contested ads are being sought. Costco does not sell Michael Kors bags either in retail stores or online, and the misleading pricing is a far cry from the high end prices seen on the Michael Kors website, ranging from $298 to $1195.
This is the second suit Costco has faced for apparent false advertising capitalizing on luxury brands’ trademarks, as Tiffany & Co. sued Costco last February for using its trademarks in online ads (as well as in an display case). Trademark infringement, especially coupled with significant price differences and involving recognized business names, could be used to dupe customers, but also have the effects of besmearing business reputations and diluting legitimate intellectual property power. It remains to be seen whether the Michael Kors v. Costco case will end in a settlement or go to court. If you have an extravagant, extraordinary or exclusive product or service in need of legal protection, contact Luxury Law Firm.
Daily Finance. (July 12, 2013). “Costco Slapped with Lawsuit from Michael Kors.” Retrieved on July 13, 2013 from http://www.dailyfinance.com/2013/07/12/costco-slapped-with-lawsuit-from-michael-kors/
Global Post. (July 12, 2013). “Michael Kors sues Costco for false advertising.” Retrieved on July 13, 2013 from http://www.globalpost.com/dispatch/news/thomson-reuters/130712/michael-kors-sues-costco-false-advertising
Image Credits: Costco: www.costco.com; Michael Kors: Photo: Ed Kavishe, Fashion Wire Press