Tiffany Appeals in Case Regarding eBay Auctions of Counterfeits
August 11, 2008. Tiffany announced in a release that it has filed an appeal with the U.S. Court of Appeals (2ndCir) of the judgment of the U.S. District Court (SDNY) in Tiffany v. eBay, a trademark case.
Tiffany, Inc. and Tiffany and Company, jewelry companies, filed their original complaint in the District Court on June 14, 2004, against eBay, which operates an auction web site.
Tiffany does not allege that eBay makes counterfeit Tiffany products. Rather, Tiffany asserts that eBay is liable for the sale of counterfeit Tiffany products by eBay users.
Tiffany alleged six claims in its amended complaint: direct and contributory trademark infringement in violation of 15 U.S.C. § 1114(1) and 15 U.S.C. § 1116(d), trademark infringement and the use of false descriptions and representations in violation 15 U.S.C. § 1125(a)(1)(A) and (B), direct and contributory trademark infringement under common law, direct and contributory unfair competition under common law, trademark dilution in violation of Section 15 U.S.C. § 1125(c), and trademark dilution in violation of New York General Business Law § 360-1.
The District Court held, in its July 14, 2008, opinion [66 pages in PDF], that "eBay is not liable for contributory trademark infringement."
The Court wrote that "In determining whether eBay is liable, the standard is not whether eBay could reasonably anticipate possible infringement, but rather whether eBay continued to supply its services to sellers when it knew or had reason to know of infringement by those sellers."
The District Court elaborated that "Here, when Tiffany put eBay on notice of specific items that Tiffany believed to be infringing, eBay immediately removed those listings. eBay refused, however, to monitor its website and preemptively remove listings of Tiffany jewelry before the listings became public. The law does not impose liability for contributory trademark infringement on eBay for its refusal to take such preemptive steps in light of eBay’s “reasonable anticipation” or generalized knowledge that counterfeit goods might be sold on its website. Quite simply, the law demands more specific knowledge as to which items are infringing and which seller is listing those items before requiring eBay to take action."
The District Court added that "Tiffany must ultimately bear the burden of protecting its trademark".
James Swire, a lawyer with Tiffany's law firm, Arnold & Porter, stated in the
release that "we do not believe the law allows auction sites like eBay to
continue to turn a blind eye to this problem while reaping profits from the
listing and sale of counterfeit merchandise. Trademark law does not impose a
duty on Tiffany to police eBay's site: eBay designed the site and has the
responsibility to police it."