The New York Times said the lawsuit, filed in U.S. District Court in New York City, was prompted by a complaint from a customer who said she was "disappointed to observe that Costco was offering for sale what were promoted on in-store signs as Tiffany diamond engagement rings," court papers said.
Court papers say Tiffany investigated and found Costco employees promoting the rings as Tiffany products. The store, however, did not use the Tiffany name online, the company's investigation found.
Once Tiffany brought the issue to Costco's attention, the promotions stopped, the lawsuit says.
Tiffany is seeking all of Costco's profits from sales of the rings and for damages that take into account Costco tarnishing Tiffany's name and Tiffany putting a shine on Costco's reputation, the newspaper said Friday.