July 16, 2008
Two days ago, in contrast to previous European rulings on the subject, the Federal District Court in Manhattan ruled that eBay does not have any legal responsibility to control the sale of counterfeit Tiffany goods sold on its site. As long as eBay removes the material upon complaint, it does not have to actually filter its marketplace for trademarked material.
The counsel for Tiffany, James B. Swire attacked the decision, stating that it undermines "the principal purpose of trademark law," which is protecting consumers and then brand owners.
If this decision is not overturned in the appellate court, eBay will face the issue of having to monitor things sold abroad far more rigorously than things that are sold in the US, although buyers in Europe see the same things in the marketplace that US buyers do. This is because European courts have ruled that eBay does indeed have a responsibility to actively prevent the sale of counterfeit goods on its site. A few months ago, a German court ruled that eBay must take measures preventing Rolex watches from being sold in its marketplace. EBay was also required to pay damages to Louis Vuitton for failing to prevent counterfeit goods from being sold on its site.
Comments | 5 Total
July 16, 2008 at 11:36am by Rip Empson
First of all, this battle is not over. Tiffany is sure to appeal, and they may win an appellate battle. Secondly, eBay has lost three similar cases in the recent past, brought by Rolex, Hermes, and Louis Vuitton. For far too long, eBay has been laissez faire in its attitude toward transactions that occur on the site. It's still hard to get the item you want. The site has been rife with fraudsters, big companies game the auctions with software, and the feedback system stinks. CEO John Donahoe has said that he understands the need to return to patronizing companies that want to sell goods rather than run auctions, but we'll see. Maybe if eBay lost this battle it would prove to them that they've reached the tipping point. Either way, this victory as Joe Nocera astutely said, is a pyrrhic one.
July 16, 2008 at 12:05pm by David Mullings
Hmm...don't flea markets have a legal obligation to prevent the sale of counterfeit goods?
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Am I the only person who always thought eBay as the largest flea market?
July 16, 2008 at 1:20pm by Carel Two-Eagle
ebay has the strange idea that the buyers are supposed to do their job of providing consumer confidence and confidence in ebay's integrity for it. I've always thought of ebay as the largest flea market around, and so far as I know, flea markets do have a legal obligation to prevent the sale of counterfeit goods, once they know about it. That's the catch - 'once they know about it'. Thus their attitude that someone must notify them before they will take action against scammers. As a result, I'm extremely skeptical about goods coming from ebay and I don't even look there much. I hope ebay loses its battle with Tiffany, and then will do more to build confidence in the minds of we who might buy through ebay. I'm not sure what that would be, but there must be something suitable..
July 17, 2008 at 2:55pm by Dorn Lynch
The value of ebay is only partially based in it providing a transaction forum. If ebay is seen not as a facilitator of fair trade but only as a common medium of exchange, they may ride their momentum for a while, but their value and distinction will fade.
They should hope Tiffany wins.
July 22, 2008 at 8:44am by Ed Camblor
If you place an ad in your local paper to sell a designer bag, does the paper have the obligation to make sure that it's not a fake? Why should eBay be forced to show that all items on it's site are not counterfeit? What these companies want is that NONE of their items are sold on the site. Under the first sale doctrine, a person should be able to sell any item that they legitimately bought.