Tiffany v. eBay: Round 2

Just because Tiffany & Co. lost the second round of its anticounterfeiting battle with eBay doesn’t necessarily mean that’s the end of the fight.

After the 2nd U.S. Circuit Court of Appeals in New York ruled on April 1 that the auction site’s listing of counterfeit Tiffany items does not constitute trademark infringement—agreeing with a lower court—the 173-year-old jewelry company announced its plans to appeal.

Though the two sides are arguing over concepts such as copyright protection, the case fundamentally comes down to money—namely, who should shoulder the burden of tracking down fake Tiffany items on eBay. Tiffany acknowledged that eBay complies with its requests to remove counterfeit listings, often in less than 24 hours. However, because of the volume of Tiffany goods sold on the site—one search by JCK brought up more than 5,000 rings, necklaces, bracelets, and other items—counterfeit-monitoring has proved to be expensive and time-consuming.

Copyright holders “have to police eBay 24 hours a day and 365 days a year,” wrote the Council of Fashion Designers of America in a supportive brief. “This is a burden that most mark holders cannot afford to bear.”

But since eBay did “not ignore the information about counterfeit items,” wrote the court, the site was not liable for every piece sold. eBay employs 200 people in its Trust and Safety division to address counterfeit issues, the court noted, further arguing that if eBay removed everything labeled “Tiffany” from its site, that “would unduly inhibit the lawful resale of genuine Tiffany goods.” eBay currently earns $4.1 million a year from Tiffany products in its Jewelry and Watches category.

Tiffany did at least win one point: eBay had purchased links on Google and Yahoo—promos that the jewelry company called misleading (since eBay knew how many fakes were constantly being sold). Referring the case back to the original judge, the appeals court suggested the ads be modified with a disclaimer.