Issaquah-based Costco Wholesale Corporation announced its response to the Aug. 14 ruling in the lawsuit brought by Tiffany & Co. against the retail giant. Costco was ordered to pay over $19 million to Tiffany.

Costco responded that the ruling is a product of multiple errors in pretrial, trial and post-trial rulings and intends to appeal.

A district court had ruled in 2015 that Costco had committed trademark counterfeiting when Costco displayed solitaire diamond rings in its membership warehouses next to signage that included the word “Tiffany” not combined with an immediately following modifier such as “setting,” “set” or “style.”

In October 2016, a jury had returned a verdict identifying amounts of profits earned on certain ring sales, statutory damages and punitive damages.

The diamond ring in question had a pronged setting style that is commonly known as a “Tiffany” setting. Costco intended that the word “Tiffany” in its signs conveyed only that the rings had this style of setting — not that the rings were Tiffany & Co. brand rings. That was consistent with decades of dictionary definitions and usage in the industry, and among many buyers of diamond rings, according to Costco.

Just prior to trial, Tiffany & Co. acknowledged that Costco was not liable for signs used by Costco stating “Tiffany setting” or “Tiffany set.” Many of the signs about which Tiffany & Co. initially complained (but later abandoned) contained these phrases. The primary focus of the trial was a small subset of Costco signs using “Tiffany” without using the noun “setting” or “set.”

Signs that said “Tiffany setting,” “Tiffany set” or “Tiffany” were in use at Costco for many years. Tiffany first complained to Costco about them in late 2012. Costco promptly changed its signs to omit all references to Tiffany, including the phrases “Tiffany set” and “Tiffany setting” (as to which Tiffany later conceded Costco has no liability). Costco also proceeded voluntarily to provide Tiffany with information concerning its sales and profits on the rings sold under the Tiffany signs; this process was underway when Tiffany filed a lawsuit on Valentine’s Day 2013, with enormous attendant publicity.

Shortly thereafter, Costco wrote to customers who may have purchased rings whose display case signs included the word “Tiffany” and reminded them of Costco’s member satisfaction policy and their right to return rings with which they were dissatisfied for any reason.

The rings in question were not stamped or otherwise marked with the Tiffany & Co. name, but rather were stamped with the name of the company that manufactured them. They were sold in plain beige and brown wooden boxes, rather than with blue boxes or bags that said Tiffany & Co. The rings were accompanied by appraisal documents that did not mention Tiffany & Co., and with sales receipts that did not say Tiffany or Tiffany & Co.

Tiffany & Co. did not claim in the lawsuit that it lost a single sale to Costco as a result of any sign. From a purchaser list of approximately 2,500, Tiffany identified fewer than 10 who said that they had misunderstood Costco’s signage. Costco stated that this was not a case about counterfeiting in the common understanding of that word, as the retailer was not selling imitation Tiffany & Co. rings.

Costco’s President and CEO Craig Jelinek stated in a press release, “Our mission statement mandates first that we obey the law and second that we take care of our members.” Over 90 percent of our members in the U.S., who pay to shop with us, renew their memberships every year. We work very hard to maintain their trust, and we strive to be candid with them. These efforts will continue whatever the final outcome of this lawsuit may be.”

Costco currently operates 737 warehouses, including 512 in the United States and Puerto Rico, 97 in Canada, 37 in Mexico, 28 in the United Kingdom, 25 in Japan, 13 in Korea, 13 in Taiwan, eight in Australia, two in Spain, one in Iceland, and one in France. Costco also operates electronic commerce web sites in the U.S., Canada, the United Kingdom, Mexico, Korea and Taiwan.