eBay Wins Case Against Tiffany & Co |
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| Tuesday, 15 July 2008 | |
 Protecting trademarks is the primary burden of rights owners, not marketplaces like eBay. That is the conclusion of a US federal-court ruling in a lawsuit between eBay and Tiffany. The famous jeweler with the coveted blue boxes brought action against the prominent online marketplace alleging that
hundreds of thousands of counterfeit silver jewelry items were offered for sale on eBay’s website between 2003 and 2006. Although Tiffany acknowledges that individual sellers, rather than eBay, are responsible for listing and selling counterfeit, the New York jeweler argues that eBay was on notice that a problem existed and therefore had an obligation to investigate and control the illegal activities of its sellers. In response, eBay contended that it is Tiffany’s burden, not eBay’s, to monitor the eBay website for counterfeits and to bring counterfeits to eBay’s attention.
The ruling came down decisively in favor of eBay and against Tiffany. The decision runs counter to recent rulings in Europe, where courts have held that Web sites bear more responsibility in monitoring their online properties. EBay, for example, lost a June 30 ruling in which a French court decided that it must pay €40 million ($63.7 million) in damages to LVMH Moët Hennessy Louis Vuitton SA and other luxury-goods makers. "This creates two very distinctive e-commerce worlds: the U.S. is the Wild West, and Europe is carefully controlled," Susan Scafidi, a professor at Fordham Law School who teaches courses in fashion law, told the Wall Street Journal. "This creates a very wide gap for the responsibility and where the burden is placed." Diane von Furstenberg, who has made the problem of counterfeits and the protection of original designs a key issue as president of the Council of Fashion Designers of America, told Women’s Wear Daily: "Fakes are damaging not only to brand owners but also to the consumers who unknowingly buy them. Stopping the sale of fakes online is a constant battle for sought-after brands. It's unfortunate that the court did not go further in recognizing that online auction sites have an obligation to prevent the sale of fakes on their sites. Tiffany is expected to appeal. Image: Tiffany & Co |
Accordingly, the heart of the dispute was not whether counterfeit Tiffany jewelry should flourish on eBay, but rather, who should bear the burden of policing Tiffany’s valuable trademarks in Internet commerce.