In a major legal victory for eBay, a U.S. district court in New York has ruled that the online auction platform can't be held liable for the sale of counterfeit items on its Internet sites.
Judge Richard J. Sullivan, in the July 14 decision, said that Tiffany & Co. failed to prove its claims that eBay was to blame for trademark infringement on its sites "based solely on their generalized knowledge that trademark infringement might be occurring."
The court sided with eBay's contention that brand owners, and not eBay, are responsible for policing their trademarks online.
In a statement released through its eBay Ink blog, eBay called the decision a victory for consumers.
"The ruling confirms that eBay acted reasonably and has adequate procedures in place to effectively address counterfeiting. The ruling appropriately establishes that protecting brands and trademarks is the primary burden of rights owners," the statement reads. "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."
The New York ruling stands in stark contrast to two recent court decisions in France, where eBay was found to be complicit in the sale of knock off handbags, cosmetics and perfumes bearing the high-end fashion labels of Hermes and Louis Vuitton Moet Hennessey. In total, eBay was ordered to pay more than $63 million in damages. eBay's appeal of the LVMH ruling was tossed out last week.
As in the European lawsuits, Tiffany alleged that eBay knew about—but didn't do enough to stop—the sale of bogus merchandise. eBay argued that the luxury jeweler chose not to participate in its Verified Rights Owner (VeRO) program. The program was set up to help prevent fraud by allowing brand owners to report infringing listings and have them removed from eBay.
eBay has said that in 2007 alone, more than 2 million potentially infringing listings were removed and more than 50,000 sellers suspended who were believed to have been trying to sell counterfeits.
Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.
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