Costco, Tiffany, and policing your trademark rights

Costco recently got in trouble for selling rings described as "Tiffany" rings.  Costco argued that using a common name such as "Tiffany" did not constitute trademark infringement as it just described a type of ring setting.  The Court did not agree, granting damages in the amount of $5.5 million to Tiffany & Co.

As Tiffany is aware, policing your trademark is quite important.  Simply allowing others to use your make may result in dilution, and ultimately, your mark may become generic.  Names such as "dry Ice," "laundromat," and "thermos" were previously federally trademarked but have all become generic, mainly due to the public's use of such terms and the inability of the owners of the respective marks to properly enforce their rights.  

A lot of the policing trademarks can be accomplished by simply educating the public.  Xerox is a good example of a company that is trying its hardest to ensure that its mark does not become generic.  They have put out ads that say, "If you use "Xerox" that way you use "zipper," our trademark could be left wide open."  Xerox understood the value of a federally registered trademark and they recognized the danger of losing the mark resulting from the public's use of the word "xerox."  

When you find someone else using your mark, the first step is typically to send a demand letter explaining the infringement.  Hopefully, they will cooperate and stop using the mark.  Unfortunately, that is typically not the case.  Should they continue using the mark, then you must decide how to proceed.  Will not filing a lawsuit be deemed you not enforcing your legal rights?  Could this result in loss of trademark rights in the future?  And as always for any lawsuit, a cost-benefit analysis needs to be performed.  All of these items must be analyzed when someone is infringing your mark before determining how to proceed.