A US judge has ruled that eBay has fulfilled its obligation to investigate and control people trying to sell counterfeit Tiffany goods on its Web site.
Judge Richard Sullivan of the U.S. District Court for the Southern District of New York, ruled that Tiffany, and not eBay, is responsible, for monitoring the eBay Web site for counterfeit Tiffany goods and for bringing those counterfeit goods to eBay's attention.
The ruling is a major victory for eBay in its fight with luxury goods companies over the sale of their merchandise - counterfeit or otherwise - on the eBay Web site. It will also be a relief to the owners of other e-commerce web sites.
Although the judge said he was sympathetic to Tiffany's claims, he said the law was clear and the burden was on the trademark owner to police its mark.
"Companies like eBay cannot be held liable for trademark infringement based solely on their generalised knowledge that trademark infringement might be occurring on their Web sites," Sullivan said in his ruling. "[T]he court finds that the plaintiff has failed to satisfy its burden on all of its claims."
A Tiffany spokesman said, "We are shocked and deeply disappointed in the district court's erroneous reading of the law."
"This ruling allows sellers of counterfeit goods on eBay to victimize consumers. Tiffany filed the case because we believed, and continue to believe, that eBay unfairly and illegally profits at Tiffany's and the public's expense through the sale of counterfeit merchandise and thereby damages the public's confidence in the integrity of the marketplace."
The spokesman said the sale of counterfeit Tiffany merchandise on eBay is not only an issue for Tiffany, but also for members of the public who may believe that that are buy authentic Tiffany goods when, there's a chance they are buying counterfeit goods.
"We believe that eBay is legally responsible for the trademark infringement of those selling counterfeit Tiffany jewellery, and that eBay cannot avoid liability by placing the entire burden of enforcement on Tiffany and on the other manufacturers of well-known brand name products," he said.
The spokesman added he would be surprised if Tiffany did not appeal the decision.
"The ruling confirms that eBay acted reasonably and has adequate procedures in place to effectively address counterfeiting," said eBay spokeswoman Nichola Sharpe. "The ruling appropriately establishes that protecting brands and trademarks is the primary burden of rights owners. While today's decision is a victory for consumer choice, it is a shame that so much effort has been wasted when Tiffany could have worked with eBay to more effectively fight counterfeits. EBay will continue to lead the industry with innovative solutions to stop the sale of counterfeits."
In June a French court fined eBay $61 million for allowing the sale
of Louis Vuitton Malletier and Christian Dior Couture counterfeit goods on its Web site. That decision came on the heels of a similar ruling by a separate French court that ordered eBay to pay $31,000 to Hermes International for selling fake Hermes handbags.