Tiffany Defeated in Trademark Case vs. eBay

By JCK Online Staff -- JCK Online, 7/14/2008 2:09:00 PM

Companies such as Tiffany & Co. are responsible for policing their trademarks online, not auction platforms like eBay, a federal judge said Monday.

Tiffany had sued eBay over the sale of counterfeit jewelry on eBay's sites. The ruling by U.S. District Judge Richard J. Sullivan in New York Monday is a defeat for the luxury jeweler.

The judge ruled that eBay can't be held liable for trademark infringement "based solely on their generalized knowledge that trademark infringement might be occurring on their Web sites," The Associated Press reports.

Sullivan's ruling came in response to a lawsuit filed in 2004, in which Tiffany alleged that most items listed on eBay as genuine Tiffany products were fakes. The company said it had asked eBay to remove counterfeit listings, but the sales continued.

EBay spokeswoman Nichola Sharpe said Monday that the ruling "confirms that eBay acted reasonably and has adequate procedures in place to effectively address counterfeiting," the AP reports.

Last month, a French court ordered eBay to pay more than $61 million to LVMH Moet Hennessy Louis Vuitton SA, which charged it was hurt by sale of counterfeit bags, perfume, and clothes. EBay is appealing that ruling.

EBay says it spends tens of millions each year to combat counterfeiting. It runs a program that lets companies review listings and inform eBay of those they believe are for fake goods. The company also suspends and blocks users who have been found selling or are suspected of selling fake goods on eBay.

EBay says that in 2007, 50,000 sellers were thrown out for counterfeits, with 40,000 previously suspended sellers blocked from returning.